Backdating job steve
In the modern business world, the Sarbanes-Oxley Act has all but eliminated fraudulent options backdating by requiring companies to report all options issuances within 2 days of the date of issue.
Options backdating may still occur under the new reporting regulations, but Sarbanes-Oxley compliant backdating is far less likely to be used for dishonest reasons due to the short time frame that is allowed for reporting.
The Apple stock-backdating scandal was one of the first times these two seemingly opposite poles — Apple’s countercultural ethos and the realities of big business — collided.
The SEC’s opinions regarding backdating and fraud were primarily due to the various tax rules that apply when issuing “in the money” stock options versus the much different – and more financially beneficial – tax rules that apply when issuing “at the money” or "out of the money" stock options.
, which broke the Apple stock-backdating story, Jobs’ award of 7.5 million shares got approved at a board meeting on August 29, 2001. However, Jobs continued to argue over the point at which the options would vest.
That resulted in Apple missing the deadlines for filing the proper information with the Securities and Exchange Commission and its auditors. Ultimately, it seems Jobs swapped these options for restricted stock of lesser value.
Typically, execs get the option to purchase a certain amount of stock at a set price.
The lower this “strike price,” the less the executive pays for the stock.