Ethics of options repricing and backdating Adult texting hookup
However, each of these approaches is not without its own separate concerns and should be reviewed in light of the facts and circumstances of the particular situation.
For example, when considering a six and one day exchange, there is risk to the employee that the fair market value will rise as of the reissuance date; or when considering a restricted stock award a company should consider whether the employees will have the cash available to pay for the stock at the time of award.
Under this approach a company grants additional stock options at the lower stock price on top of the old underwater options without canceling the old underwater options.
Each of these approaches should avoid variable accounting treatment.
It has emerged despite all the measures (i.e., new regulations and additional corporate governance mechanisms) aimed at addressing such problems?
Alternative Repricing Approaches Over the past year several of our clients have considered repricing their underwater stock options and we have participated in at least three repricing approaches that seek to avoid the accounting concerns described in the prior section.What ethical measures need to be taken to address the agency problem?What values and norms should guide the board of directors in protecting the shareholders’ interests?Corporate Governance Considerations The decision of whether to undertake a stock option repricing is a matter of corporate governance for the board of directors to consider and approve.In general the board of directors of a company has the authority to reprice stock options, although some thought should be given to whether this is an appropriate exercise of the board’s business judgment.