Executive stock option plans backdating motivation

The mission of the Stanford Graduate School of Business is to create ideas that deepen and advance the understanding of management, and with these ideas, develop innovative, principled, and insightful leaders who change the world. The general management curriculum rests on a foundation of social science principles and management functions, tailored to each student’s background and aspirations. This is a hands-on course with an emphasis on experiential learning. The project will feature financial statement and valuation analysis to assess the risks and rewards of the proposed strategy. The course will be of value to those students who anticipate making investment decisions using financial statement information. At the same time, increasing attention is being paid to regulatory and market design issues that could either impede or enhance market pricing efficiency.n n In this course, we will cover recent research on the role of informational arbitrage in asset pricing.

A.) degree program prepares change agents to make a meaningful impact in the world through leadership of business, government, and social-sector organizations. nnn The overall goal of this course is to improve student skills in assessing the relative attractiveness of individual companies, as well as in managing portfolio risk according to pre-specified targets. As part of this course, students will be required to design stock screens, conduct back-tests, do detailed company analyses, execute (virtual) trades, and manage portfolio risk. Students will work in groups to develop a recommendation for an event-driven investment strategy. The course seeks to provide an introduction to the role of accounting information in (i) measuring firm performance, (ii) projecting profitability and firm value for external constituents, (iii) and motivating and controlling the firm's management. The range of applications includes: the structure of managerial performance measures, capital budgeting, intra-company pricing, discretionary bonus pools, the role of non-financial performance indicators and earnings management. While earlier studies tend to view the matter as a yes/no debate, many recent studies now acknowledge the impossibility of fully efficient markets, and have focused instead on analyses of factors that could materially affect the timely incorporation of information into prices.

The backdating concern occurs when the company does not disclose the facts behind the dating of the option.

In order to lock in a profit on day one of an options grant, some executives simply backdate (set the date to an earlier time than the actual grant date) the exercise price of the options to a date when the stock was trading at a lower level. In this article, we'll explore what options backdating is and what it means for companies and their investors. Most businesses or executives avoid options backdating; executives who receive stock options as part of their compensation, are given an exercise price that is equivalent to the closing stock price on the date the options grant is issued.

This means they must wait for the stock to appreciate before making any money.

Interdisciplinary themes of critical analytical thinking, creativity and innovation, and personal leadership development differentiate the Stanford M. Students will make extensive use of analytical tools in the new "Real-time Analytics and Investment Lab" (High-speed R. Our starting point is the observation that, with costly information, equilibrium prices will invariably reflect some mispricing.

25% of the grades will be based on class participation, and 75% will be based on the presentations and reports. The course will focus on valuing the securities of companies undergoing significant changes as a result of litigation, restructuring, regulatory changes, mergers, spin-offs or significant industry shifts. This course is aimed at doctoral students in accounting and neighboring fields including economics, finance, political economics and operations management. Because these issues are also of concern to financial reporting standard setters, we will discuss whether and how the research we study informs standard setting debates. Common to these studies is that agents acquire private information that is valuable to other parties. Over this period, the focus of academic research has gradually shifted from the general to the more specific.

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