Ethics of stock option backdating
Therefore, the alternative hypothesis we propose, which we broadly label Agency Hypothesis, is that a firm’s involvement in the backdating scandal has significant economic implications, despite its limited (direct) impact on cash flows.
Under this hypothesis, the losses generated by the option backdating scandal can arise because management’s involvement in backdating practices may prompt investors to reassess the agency costs stemming from the separation of ownership and control.
As such options is unlikely that everyone in society would accept as a universal rule that management should be given preferential treatment.Repricing activities undermine the incentive justification for use of stock option plans.Executives deserve compensation packages that provide both short-run benefits and backdating long-run motivation to increase organizational value for all stakeholders.Minneapolis, MN - The Society of Corporate Compliance and Ethics (SCCE) announced today that a new session "Option Backdating: An Open Discussion" has been added to the SCCE 5th Annual Compliance & Ethics Institute program agenda. The complete brochure is available online at: Options Session Information According to recent published reports, over 90 companies are under investigation by federal prosecutors, regulators or independent board committees for backdate stock option grants. will discuss: -- The history of and current developments surrounding the option backdating scandal -- The accounting and tax implications for backdating --How investors are identifying potential "backdaters" using publicly available information The SCCE also announced that Alex Brigham, President & CEO of PLI - Corpedia, Inc. The Compliance & Ethics Institute Faculty includes: -- U. Securities and Exchange Commission Associate Director Scott Friestad -- Vice Chair, U. Sentencing Commission, Honorable Judge Ruben Castillo -- Charles Elson, Chair in Corporate Governance, Weinberg Center for Corporate Governance, University of Delaware -- Wal-Mart Chief Ethics Officer Ann Cato -- Microsoft Corporation Director of Compliance Odell Guyton -- Compliance Systems Legal Group Partner Joseph Murphy -- President & CEO, Center for Ethical Business Cultures, University of St. Africa) Mollie Painter-Moreland -- Commissioner, U. Conference Program For a complete list of faculty and topics click here: Corporate excesses and resulting legislation such as the Sarbanes-Oxley Act has spawned a new C-level executive in today's modern corporation--the Corporate Compliance and Ethics Officer. The Corporate Compliance Officer position may now be found in almost every industry, in public and private companies, and in nonprofit organizations. item=4 Press Passes Press Passes are available for the 5th Annual Compliance & Ethics Institute. This landmark conference, packed with timely and essential information, will bring hundreds of corporate compliance, governance and ethics leaders to the Chicago Downtown Marriott on September 11-13, 2006. For the Compliance & Ethics Institute the SCCE has assembled an international panel of experts to address a myriad of national and global compliance and ethics concerns. Attorney, Eastern District of Pennsylvania James G. -- Winner of SCCE's 2006 International Compliance Award and Director, Center for Business & Professional Ethics, University of Pretoria (S. Sentencing Commission, Michael Horowitz -- Boeing VP Ethics and Business Conduct, Martha Ries -- Kraft Chief Counsel--Global Compliance, Theodore Banks -- Qwest Communications Chief Compliance Officer, David Heller And more! executive search firm, listed Chief Compliance Officer third among their Top 10 Hot Jobs for 2005.
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