New Option Timing Study Conducted
Bookmark & ShareNovember 17, 2006
Source: Los Angeles Times
Backdating of stock options was more likely to occur at companies that did not have independent board directors in the majority, according to a study being released today. Of the 5,800 companies examined, as many as 720 appear to have backdated the stock option grant dates to coincide with a low point in the stock price, thereby boosting the gains to executives who received the options. ERIK LIE, a finance professor at the University of Iowa whose study on backdating ignited the scandal this year, said his research indicated that 2,200 companies manipulated stock grants. But the two studies used different methods to identify cases of suspected backdating. Lucian Bebchuk, a Harvard professor and a coauthor of the new report. said his study was focused less on the number of companies that backdated options and more on the factors that might have allowed the practice to happen.
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