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Lie Research Applied To Canadian Companies

While an ever-widening stock-option scandal south of the border has U.S. investors angry and worried, Canadian investors may be feeling a little smug. But that conceit may be premature, at least according to a new report suggesting that some of Canada's largest companies may also be manipulating the timing of stock-option grants to give executives bigger bonuses. An analysis of options granted over the past three years by Canada's 60 largest and most heavily traded companies shows a troubling pattern of share prices falling in the days before options are granted, followed by a sharp upturn shortly afterward. The stock options backdating was uncovered by ERIK LIE, a finance professor at the University of Iowa, who studied thousands of U.S. companies.

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