Compton, Ryan and Sandler, Daniel and Tedds, Lindsay M. (2010): Options backdating: a Canadian perspective. Published in: Canadian Business Law Journal , Vol. 47, No. 3 (2010): pp. 329-362.
Download (405kB) | Preview
This paper provides an overview of (1) the basics of employee stock option backdating; (2) why firms and individuals may engage in backdating; (3) the difficulties in examining option backdating in Canada as well as a Canadian case study of option backdating; (4) implications of backdating; and (5) suggestions for curbing the potential to backdate in Canada.
|Item Type:||MPRA Paper|
|Original Title:||Options backdating: a Canadian perspective|
|Keywords:||Backdating, Executive stock options, Compensation|
|Subjects:||J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J38 - Public Policy
N - Economic History > N2 - Financial Markets and Institutions > N22 - U.S. ; Canada: 1913-
M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M52 - Compensation and Compensation Methods and Their Effects
|Depositing User:||Lindsay Tedds|
|Date Deposited:||03 Jul 2012 12:35|
|Last Modified:||26 Feb 2016 07:56|
K. Murphy, ―Executive Compensation‖ in Orley Ashenfelter and David Card (eds.), Handbook of Labor Economics, Vol. 3, (New York: North Holland, 1999)
J. Hall and K.J. Murphy, ―The Trouble with Stock Options‖ (2003) vol. 17, no. 3 Journal of Economic Perspectives 49-70;
The Conference Board, The 2006 Top Executive Compensation Report (New York: The Conference Board, 2006).
K.J. Klassen and A. Mawani, ―The Impact of Financial and Tax Reporting Incentives on Option Grants to Canadian CEOs‖ (2000) vol. 17, no. 2 Contemporary Accounting Research 227-262
K. Press, ―Editorial: Stock in Trade‖ (1999) vol. 23, no. 9 Benefits Canada 7.
K.J. Klassen, ―Options for Compensation‖ (2002) vol. 135, no. 6 CAMagazine 41-44
M. R. Conway, ―Money for Nothing and the Stocks for Free: Taxing Executive Compensation,‖ (2008) vol. 17 Cornell Journal of Law and Public Policy 383-429
E. Lie, ―On the Timing of CEO Stock Option Awards‖ (2005) vol. 51, no. 5 Management Science 802-812
M.P. Narayanan and H. N. Seyhun, ―Do Managers Influence their Pay? Evidence from Stock Price Reversals Around Executive Option Grants‖, Working Paper, University of Michigan, Version: January 2005.
M.P. Narayanan and H. N. Seyhun, ―Effect of Sarbanes-Oxley Act on the Influence of Executive Compensation‖ Working Paper, University of Michigan, Version: March 2006
M.P. Narayanan and H.N. Seyhun, ―The Dating Game: Do Managers Designate Option Grant Dates to Increase Their Compensation‖ (2008) vol. 21, no. 5 Review of Financial Studies 1907-1945
R.A. Heron and E. Lie, ―What Fraction of Stock Option Grants to Top Executives Have Been Backdated or Manipulated?‖ (Forthcoming) Management Science
R.A. Heron and E. Lie, ―Does Backdating Explain the Stock Price Pattern Around Executive Stock Option Grants‖ (2007), vol. 83, no. 2 Journal of Financial Economics 271-295
M.P. Narayanan C.A. Schipani, and H.N. Seyhun, ―The Economic Impact of Backdating of Executive Stock Options‖ (2007) vol. 105, no. 8 Michigan Law Review 1597-1642
D.I. Walker, ―Unpacking Backdating: Economic Analysis and Observations On The Stock Option Scandal‖ (2007) vol. 87, no. 1 Boston University Law Review 1-58.
J. Melnitzer, ―Manipulation ‗Serious Problem‘‖, Financial Post, September 19, 2007.
T. Petruno, ―In Options Backdating Scandal, Shareholders are Real Victims‖, Los Angeles Times, August 13, 2005.
D. Yermack ―Good Timing: CEO Stock Option Awards and Company News Announcements‖ (1997) vol. 52, no. 2 Journal of Finance 449-476.
K.W. Chauvin and C. Shenoy, ―Stock Price Decreases Prior to Executive Stock Option Grants‖ (2001) vol. 7, no. 1 Journal of Corporate Finance 53-76.
Securities Act, RSO 1990, c. S-5, s. 107(2) (as amended by SO 1999, c. 9, s. 214).
L. Cicconi, ―Blaming the Tax Code for the Backdating Scandal‖ (2007) vol. 114 Tax Notes 1129.
D. Sandler, ―The Tax Treatment of Employee Stock Options: Generous to a Fault‖ (2001) vol. 49, no. 2 Canadian Tax Journal 259-319
C. Southam and S. Sapp, ―Comparing CEO compensation between neighbors: What can we learn from cross-listed firms?‖ (January 2008), available at SSRN: http://ssrn.com/abstract=869868.
G. Bernile and G.A. Jarrell, ―The Impact of the Options Backdating Scandal on Shareholders‖ (Forthcoming) Journal of Accounting and Economics.
C.A. Johnson, ―Stock and Stock Option Compensation: A Bad Idea‖ (2003) vol. 51, no. 3 Canadian Tax Journal 1259-1290.
D. Sandler, ―The Benchmark Income Tax Treatment of Employee Stock Options: A Basis for Comparison‖ (2003) vol. 51, no. 3 Canadian Tax Journal 1204-1229.