Backdating employee stock options tax implications Cam se x free with no join or credit card
November 2006 As we have been reminded recently, it is important that companies with stock option and other equity based compensation plans implement and adhere to grant procedures.
This is a good time to review your option grant procedures and controls.
Below are our recommendations with respect to oversight of stock option grant and other equity compensation programs.
Recently, media and regulatory attention has been directed at two types of potential problems with respect to option grant practices.
Taking a very different tack, Comverse's former CFO, David Kreinberg, last week became the first top level executive to settle actions brought by the SEC and the US Attorneys' Office since options backdating came into the media spotlight last Spring.
In settling with the SEC, the former Comverse CFO consented to, among other sanctions, a permanent injunction against violation of the securities laws, a permanent bar against serving as a corporate officer or director, and payment of .4 million in disgorgement and pre-judgment interest.
As most of you know, the Comverse criminal case has had a certain amount of drama surrounding former CEO Kobi Alexander, who was first a fugitive from justice, and later was located after he took up residence in Namibia, where he is presently fighting extradition to the United States.
Rather obviously, this fact pattern results in a violation of the SEC's disclosure rules, a violation of accounting rules, and also a violation of the tax laws.
The SEC has been after the problem of abusive options backdating for several years.
The first involves the actual timing of option grants and the second involves the procedures for pricing stock options.
The Securities and Exchange Commission and the Department of Justice have initiated several investigations into situations where significant option grants were made and priced at times when the stock’s fair market value (and, so, the exercise price of the options) was low relative to the stock’s value at other times during the period during which the grants were made.
Search for backdating employee stock options tax implications:
That, of course, is what is meant by abusive "backdating" in today's parlance.