Options backdating is much tougher to execute today.Before Sabanes Oxley, companies had two months to report to the SEC that an option grant event had taken place.
He pocketed $23.1 million in profit when he exercised most of these options between 19.
Had the grant come 10 days earlier, when the stock price was much stronger, he would have made $1.4 million less. Tomasetta’s nine option grants from 1994 to 2001, the grants were dated just before double-digit price surges in the next 20 trading days.
The odds of such a pattern occurring by chance are about one in 26 billion.
What struck me about the article was the fact that it was entirely focused on CEO pay.
Singling out the CEO as the only one who profited from these machinations is misleading but makes for great press.
I’m not commenting from an independent perspective considering I profited both financially and intellectually from my years at Vitesse.
But backdated or not, options are crucial for incentivizing the entire workforce of technical companies, not just the CEO.
Reporting like this never fails to strike a chord with those who beat the drum that some CEOs are overcompensated, and it is true that some are.
I decided to pull my old option statements from Vitesse.