Lie Testifies To Senate About Backdating
Bookmark & ShareSeptember 7, 2006
Source: Los Angeles Times
Members of Congress on Wednesday said they might seek to repeal a measure that was meant to put a lid on executive pay but may have instead triggered ever-richer stock option deals. At issue is a 1993 tax provision that barred companies from deducting salaries above $1 million as a business expense unless they were tied to performance. In response, many companies curtailed executive salaries and made up the difference with the stock option grants that are at the heart of an unfolding controversy. ERIK LIE, a finance professor at the University of Iowa who has done influential research on the matter, told a joint meeting of the U.S. Senate Banking and Finance Committees Wednesday that timing ploys appeared to be more common among technology firms, smaller companies and those with highly volatile stock prices. From 1996 to 2005, he said, 29 percent of a large sample of firms that granted options to top executives engaged in one or more forms of manipulation. The same story also appeared on the Web sites of the SEATTLE TIMES and BALTIMORE SUN.
Contact: Erik Lie, ,
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