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”
Seven BLB&G Partners Named Among the “500 Leading Lawyers in America” by Lawdragon
Lawdragon Names BLB&G Attorneys to 500 Leading Lawyers in America List and Inducts Founding Partner Max Berger into its “Hall of Fame”
March 12, 2020
BLB&G Allianz Structured Alpha Funds Team Announces New Case Filing
October 16, 2020
Lawdragon Names BLB&G Partners to The 2020 Edition of the "500 Leading Plaintiff Financial Lawyers" List
Lawdragon Names 20 BLB&G Attorneys Among its “500 Leading Plaintiff Financial Lawyers” list
Lawdragon Profiles BLB&G Partner Jeroen van Kwawegen in “Lawyer Limelight” Q&A
Lawdragon Profiles Groundbreaking Workplace Protections Achieved by BLB&G in its Fox Derivative Litigation