Misdating

Posted by / 23-Jan-2018 10:43

Misdating

SEC Chairman Christopher Cox recently stated that the proposed SEC rules on disclosure of executive compensation will “almost certainly address options backdating explicitly.” I. Companies have considerable discretion in determining the timing of stock option awards.Most employee stock options are, or purport to be, granted “at-the-money,” meaning that the exercise price of the option equals the market price of the underlying stock on the date of the grant.

Under Section 409A, the recipient could be subject to acceleration of taxable income and additional taxes and penalties, and the company could be subject to special tax withholding and reporting requirements.

It could also lead to delays in filing financial statements while the magnitude of the problem is determined.

Adverse tax consequences may result from option backdating practices.

Options granted as of the date of employment acceptance are also troublesome if the plan does not permit grants to non-employees or if the additional tax and accounting issues relating to grants to non-employees are not adequately addressed.

A company may decide to grant options on a specific date but the corporate formalities may not be completed until a later date.

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Another scenario involves the allocation of grants to employees from an authorized pool.

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  1. For example, in the Middle Proterozoic Musgrave Block (northern South Australia), a wide scatter of K-Ar mineral "ages" was found, ranging from 343Ma to 4493Ma due to inherited (excess) , permitting inclusion of the gas in the crystallizing minerals.