News & Events

Lie Study Required Reading

UK finance directors have never been offered the lucrative mega-million stock option packages that American CFOs regularly rake in, but as a result they've been shielded from the latest pay scandal. The US stock options backdating furore hasn't spiked the interest of UK regulators because stringent governance standards here prevent any serious fiddling with grant dates. Tipped off by an academic study, which showed that more than 2,000 companies may have backdated options between 1996 and 2005, the US Securities and Exchange Commission (SEC) began investigating options backdating in earnest last spring. The study came from ERIK LIE of the University of Iowa and has now become required reading for those interested in executive compensation. Dr Lie doesn't name any companies, but suggests that the practice of backdating grant dates to boost senior executives' bank accounts is widespread among U.S. issuers. Financial Director is published in the United Kingdom.

Return to top of page