Benefits of backdating stock options

Apple has turned over its findings to the SEC, including those covering the the two unnamed former officers whose actions "raised serious concerns." There is also a chance that the stock options problem could result in Jobs' exit from the company, but many observers believe that is unlikely, as it would not be in the best interest of either Apple or its shareholders. INITIAL_PROPS_HEADER = {"data":,"id":"wsj/header","context":{"article Id":"SB117323521819929109","author":"Mark Maremont, Charles Forelle and James Bandler","breakpoint":"lg","corp Hat":[,],"customer Nav":{"user":null,"ads":,"urls":{"login Url":"https://com/login?Such practices are frowned upon by the Securities and Exchange Commission.Apple's practice of backdating stock options began in 1997 and continued into January 2002."Unintended Consequences: Information Releases and CEO Stock Option Grants," forthcoming in the Academy of Management Journal by Tim Hubbard, assistant professor of management in Notre Dame's Mendoza College of Business, finds that the stock prices are significantly lower than expected during these periods, leading to major gains for CEOs—between 3,500 and 9,000, depending on the assumptions. The researchers collected all news releases from each firm during the period and used this data to understand whether firms release more negative news releases in this time frame and the type of negative news.

Those filings, like Apple's, were delayed by investigations into backdating.Stock options frequently tie into executives’ compensation.Typically, execs get the option to purchase a certain amount of stock at a set price.The board has expressed complete confidence in Steve and senior management.” But the incident did affect how the public viewed Jobs.Such a situation would rank as a public scandal for any large company.

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All three companies will be forced to restate earnings for the periods in question, which can be a laborious and time-consuming process.

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