Lie Comments on Possible Stock Manipulation
Bookmark & ShareMay 14, 2006
Source: St. Louis Post-Dispatch
Top executives at Engineered Support Systems Inc. routinely received stock options shortly before spikes in the company's share price, boosting the value of the options by millions of dollars. The Securities and Exchange Commission is undertaking a broad investigation into whether companies manipulated option grant dates to boost executive pay. It's not known whether the Cool Valley-based defense contractor is part of that probe. Most of Engineered Support's top management retired after the company was sold in January to DRS Technologies Inc. for nearly $2 billion. University of Iowa finance professor ERIK LIE said it's unlikely Engineered Support executives were just lucky in getting option grants at low points in stock market trade. "If you were to look at the large sample of firms, you would not find very many firms that had more advantageous outcomes, in terms of their choice of the grant dates," Lie told the Post-Dispatch. "In fact, Engineered Support would clearly be in the top 1 percent."
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