Backdating of executive

In the context of corporate governance, the illegal practice of setting the date of options awarded as part of executive compensation to a period when the stock price was very low (rather than setting the date of the options on the date the award was made).The act of dating a document before the date it was actually signed.However, it can be permissible under certain circumstances.For instance, one may backdate an insurance claim if there was an unavoidable delay between the date the insured event occurred and the day the claim was made.

After the two-day reporting rule went into effect, the SEC found numerous companies were still backdating options in violation of the legislation.This is the granted option that would be reported to the SEC.The act of options backdating became much more difficult after companies were required to report the granting of options to the SEC within two business days.There are certain situations, however, when backdating is acceptable; however, the parties involved must agree to it.There was a spate of backdating stock options in the 2000s, mostly at technology firms that rely heavily on stock options for executive compensation, but also at some companies not in the tech sector.

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