Question
Many companies use stock options as a form of equity compensation-to motivate executives and key employees. Some stock option issuers have either backdated and/or repriced
Many companies use stock options as a form of equity compensation-to motivate executives and key employees. Some stock option issuers have either backdated and/or repriced stock options. Backdating is an illegal practice by which a company chooses a date in the past when the stock price was at its lowest point in order to maximize executive compensation. Stock option repricing is used when stock options are underwater (the market price is below the strike price). Repricing simply resets the strike price to a price below the current market price. Question: A) While backdating options is illegal and obviously unethical, what do you think about the practice of repricing stock options?
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