What is the purpose of backdating stock options

As opposed to an "at the money" option, an "in the money" option holds an intrinsic value; there is already a built-in profit at the time of the grant.

How to compensate CEOs in a way that encourages them to act in the best interest of their firms has been the topic of much research and regulation. For example, the options backdating scandal, with cases first emerging in 2006, ensnared dozens of executives over allegations that the dates of stock-option awards had been manipulated to enrich recipients.The content is provided for information purposes only.The number of cases involving options backdating continues to rise in the United States.Citation: CEOs profit from issuing negative news releases ahead of stock option grant dates (2019, February 4) retrieved 31 August 2019 from https://phys.org/news/2019-02This document is subject to copyright.Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission.

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