And backdating and dating new personal single york


The measurement date was generally the date that the number of shares subject to the option and the option exercise price were "fixed", which, under many option plans, was the date that the company's board or compensation committee approved the grant to the employee.

Under APB 25, if the company granted an option with an exercise price at or above the market price of the shares on the measurement date, then there was no compensation-related expense to be recorded.

Even if documents related to an employee-option award were dated earlier, the measurement date could not occur until the terms of the award and its recipients were fully determined.

The finding demonstrated a well-timed coincidence that triggered a number of further investigations by the SEC and the DOJ. It replaced the long-standing Accounting Principles Board Opinion No.

25 (APB 25), under which companies were only required to account for options which had an exercise price that was below the market price of the shares on the "measurement date".

Although these developments have occurred since 2002, the prevalence of backdating was not discovered until 2005.

In that year, Professor Erik Lie at the University of Iowa published a study on the University website which found an alarming propensity for option grants to occur when company share prices were unusually low relative to their historical trading levels.

Between 20, various statutes and rules were adopted which increased the transparency of listed company option grant practices.