Rim backdating stock options

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This adjustment to the filing window came in with the Sarbanes-Oxley legislation.Options backdating is the practice of altering the date a stock option was granted, to a usually earlier (but sometimes later) date at which the underlying stock price was lower.This process makes the granted option in-the-money and of value to the holder.This process occurred when companies were only required to report the issuance of stock options to the SEC within two months of the grant date.This is the granted option that would be reported to the SEC.The act of options backdating has become much more difficult as companies are now required to report the granting of options to the SEC within two business days.the much different – and more financially beneficial – tax rules that apply when issuing “at the money” or "out of the money" stock options.According to a study by Erik Lie, a finance professor at the University of Iowa, more than 2,000 companies used options backdating in some form to reward their senior executives between 19.

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Companies would simply wait for a period in which the company's stock price fell to a low and then moved higher within a two-month period.The company would then grant the option but date it at or near its lowest point.This is a way of repricing options to make them valuable or more valuable when the option "strike price" (the fixed price at which the owner of the option can purchase stock) is fixed to the stock price at the date the option was granted.Cases of backdating employee stock options have drawn public and media attention.

The process of granting an option that is dated prior to the date that the company granted that option.

In this way, the exercise price of the granted option can be set at a lower price than that of the company's stock at the granting date.

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