Abstract

http://ssrn.com/abstract=1490845
 
 

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Backdating Options and Why Executive Compensation is Not All About Norms


Geoffrey A. Manne


International Center for Law & Economics (ICLE)

Joshua D. Wright


Federal Trade Commission; George Mason University School of Law

September 1, 2006

Corporate Governance Law Review, Vol. 2, No. 3, pp. 385-394, 2006
George Mason Law & Economics Research Paper No. 10-22

Abstract:     
In this short essay we take on some of the common claims surrounding the law and economics of the backdating of options. Most of these claims are rooted in the basic argument that backdating options amounts to concealment of compensation. While we agree that backdating may have amounted to a technical rule violation in some cases, there is actually no concealment and, in fact, backdated options are fully disclosed when granted, and their value incorporated into stock price. We also challenge a few other myths surrounding the practice of backdating options.

Number of Pages in PDF File: 11

Keywords: accounting measures, corporate ignorance, corporate malfeasance, Gretchen Morgenstern, Jeff Lipshaw, Larry Ribstein, Matt Bodie, PrawfsBlawg, securities regulation, stock options, taxation of compensation

JEL Classification: D21, D23, G18, G30, G38, H25, H32, J33, J38, K22, K34, M40, M41, M52,

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Date posted: October 21, 2009 ; Last revised: May 28, 2010

Suggested Citation

Manne, Geoffrey A. and Wright, Joshua D., Backdating Options and Why Executive Compensation is Not All About Norms (September 1, 2006). Corporate Governance Law Review, Vol. 2, No. 3, pp. 385-394, 2006; George Mason Law & Economics Research Paper No. 10-22. Available at SSRN: http://ssrn.com/abstract=1490845

Contact Information

Geoffrey A. Manne (Contact Author)
International Center for Law & Economics (ICLE) ( email )
2325 East Burnside St.
Suite 301
Portland, OR 97214
United States
503-770-0650 (Phone)
HOME PAGE: http://www.laweconcenter.org
Joshua D. Wright
Federal Trade Commission ( email )
601 New Jersey Ave., NW
Washington, DC 20580
United States
George Mason University School of Law ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States
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