The options backdating
That, of course, is what is meant by abusive "backdating" in today's parlance.
The purpose of disguising an in-the-money option through backdating is to allow the person who gets the option grant to realize larger potential gains-without the company having to show it as compensation on the financial statements.
The revelation that scores of firms engaged in the illegal manipulation of stock options’ grant dates (i.e. The evidence indicates that the consequences stemming from management misconduct and misrepresentation are of first-order importance in this context as shareholders of firms accused of backdating experience large negative, statistically significant abnormal returns.
Furthermore, shareholders’ losses are directly related to firms’ likely culpability and the magnitude of the resulting restatements, despite the limited cash flow implications.
With respect to reducing excessive, non-performance-based compensation, many consider Section 162(m) a failure, including Christopher Cox, the then-chairman of the Securities and Exchange Commission, who went so far as to suggest it belonged “in the museum of unintended consequences.” Sen. These sophisticated folks are working with Swiss-watch-like devices to game this Swiss-cheese-like rule.
Charles Grassley (R-Iowa), the then-chair of the Senate Committee on Finance, was even more direct, saying: 162(m) is broken. Since Section 162(m) passed nearly 20 years ago, both academic and practitioner research has shown a dramatic increase in executive compensation, with little evidence that it is more closely tied to performance than before.
In this paper, we estimate that corporate deductions for executive compensation have been limited by this provision, with public corporations paying, on average, an extra .5 billion per year in federal taxes. Because actual tax return data are, by statute, confidential, our estimates are somewhat imprecise, as we have to infer both the tax deductibility of executive compensation and the corporation’s tax status from public filings.
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The topic of executive compensation has long been of interest to academics, the popular press, and politicians.
With the continued increase in executive compensation and resultant increase in pay disparity between those executives and the average worker, this issue is once again coming to the forefront of the public policy debate.
For example, if you have 5 devices on your account, you'll be charged a separate device access charge for each device, equaling 5 charges.
Plus, you should see one charge for your data plan.