Stock Options Paper

Accounting

Stock Options Paper

In recent months there have been many news stories in the press about executive compensation with stock options. This type of compensation occurs when an executive is granted the ?option? to purchase the company?s stock at a certain price sometime in the future. The theory is if the executive is effective his management skills will lead to a higher stock price. As a reward the executive can purchase the stock at the earlier, lower price and lock in an automatic gain in his shares. However, certain companies have been falsifying the actual date when the stock options are granted to their executives. Research this situation on the internet or through the university library. Describe the situation and the implications of the practice including any legal or ethical ramifications.