Monday, July 17, 2006

New Study: Options Backdating is Much More Widespread Than Previously Thought

Eric Lie and Randall Heron just uploaded a new study on the backdating issue. They find that backdating is much more prevalent than previously thought. Here's the abstract:
We estimate that 18.9% of unscheduled, at-the-money option grants to top executives during the period 1996-2005 were backdated or otherwise manipulated. The fraction is 23.0% before the new two-day filing requirement took effect on August 29, 2002, and 10.0% afterward. For the minority of grants that are not filed within the required two-day window, the fraction backdated remains as high as 19.9%. We further find a higher frequency of backdating among tech firms, small firms, and firms with high stock price volatility. In addition, firms that use smaller (non-big-five) auditing firms are more likely to file their grants late. Finally, at the firm level, we estimate that 29.2% of firms manipulated grants to top executives at some point between 1996 and 2005.

You can read the whole thing here.

These numbers are pretty mind boggling, and should get a lot of press. If they're right, between a fifth and a quarter of all option grants were backdated in the period before the 2002 tighter reporting requirements came into play. I haven't fully digested their methodology yet, but it looks like the numbers in the abstract are (if anything) conservative.

Note: If you're new to this topic, I've written a short primer on backdating and springloading, here.

7 comments:

Erin Moses said...

canon printer customer support number
Avast tech support phone number
Microsoft Edge Support Number
mozilla support
apple support phone number 24/7
norton customer service
hp online support
brother printer support australia
Contact number for McAfee antivirus
microsoft outlook support phone number

Jiya Rani said...

I want to to thank you for this wonderful read!! I certainly enjoyed every little bit of it. I've got you book marked to check out new stuff you post…

KBC Lottery Winner
KBC Lottery Winner 2020 List Today
KBC Lottery Winner 2020 25 Lakh List
KBC Lottery WinnerList 2020
KBC Lottery Winner 2019 25 Lakh List
KBC Lottery Number Check
KBC Lottery Number Check Online
Kaun Banega Crorepati Lottery Winner 2020

Aiden Jangra said...

If you are unable to fix HP Printer Offline issue or any common printer problems with resetting process, then don’t panic! We are there 24/7 to help you out. The thing you should do is to put a call on toll-free number and get united with talented as well as experienced tech-geeks for hands-free solution.

Faina Beatriz said...

openseaclone
openseaclonescript

Nirupama said...

raribleclone
raribleclonescript

Bajeelaaluin Tech Blog said...

Nice blog post
Opensea clone script
Rarible clone script
Decentraland clone script
Axie infinity clone script
Zed run clone script
NFT Game Development Company
NFT Marketplace Development Company
Metaverse NFT Marketplace Development Company

blockchain development said...

Benefits of cryptocurrency exchange script
binance clone script V2.0 enhanced
Crypto Exchange Software
Cryptocurrency Exchange Script
binance clone Software
bitcoin Exchange Script
binance clone Script