Stock Options Backdating Article by Jerry Silk and Noam Mandel Published in Lawdragon Magazine
October 2006In its Fall 2006 issue, Lawdragon, a national legal periodical, published an intriguing article on the recent wave of stock options backdating, authored by BLB&G Partner Jerry Silk and BLB&G associate Noam Mandel.
The article, entitled “The Compensation Game,” reviews the mechanics of stock options and how they can be used properly as a component of executive compensation in the context of a publicly filed, shareholder approved stock option plan. However, a recent review of stock option grants to executives at public companies reveals a disturbing trend – an alarming number of stock option grant dates occurred when the price of the stock was unusually low, resulting in excessive compensation for executives once they cash in their options at a later date when the stock price is higher.
The article highlights several egregious examples including UnitedHealth and Affiliated Computer Services, just two among the 100 stock options cases currently under investigation by the SEC, FBI and the Department of Justice.
While these cases are discouraging enough on their own, Mr. Silk and Mr. Mandel emphasize that they underscore the utter lack of effective governance over executive compensation practices that exist in the United States today.
BLB&G is currently prosecuting several stock options backdating cases on behalf of shareholders in derivative lawsuits.
Download: "The Compensation Game" (PDF 130.08 KB )
Also of Interest
Gerald Silk Named a Lawdragon 500 “Legend”
June 19, 2018
Lawdragon Again Names Six BLB&G Partners Among the “500 Leading Lawyers in America”
Lawdragon Again Names Five BLB&G Partners Among the “500 Leading Lawyers in America”
Lawdragon Names Five BLB&G Partners Among the “500 Leading Lawyers in America”
Law360 Profiles BLB&G as a 2018 “Class Action Group of the Year”
January 18, 2019
Lawdragon Profiles BLB&G Partner Salvatore Graziano in “Lawyer Limelight” Q&A
October 1, 2018
Benchmark Names Seven BLB&G Partners as Litigation Stars
Chambers Ranks BLB&G Nation’s Top Securities Litigation Firm
Lawdragon Profiles Hannah Ross in “Lawyer Limelight” Q&A
December 15, 2017
ISS SCAS Releases Top Securities Settlements Report: Bernstein Litowitz Leads the Field for Ninth Consecutive Year
February 11, 2019