What is so morally outrageous about back dated stock options?
The
simile is a cookie jar that your mother offers when you have been
good. But you steal from the cookie jar when she is not looking.
That
is back dating stock options. If we had next week's newspaper today we
would have perfect investment hindsight and could make a fortune. That
is back dating stock options. The Board of any company can publicly
grant a stock option and report it on quarterly reports to the
Securities and Exchange Commission. There is no legal limit on how
much money any Board can give any company employee, none.
The immoral trick is to pick a date for the grant of stock options that has passed and was a particularly low point in the stock history. That almost guarantees a stock gain that is not known to the government or shareholders.
That is both stupid, immoral and illegal. The Board of Apple could have given Steve Jobs 5 million shares of the current priced stock at any time, but instead it gave him 4 million shares for a previously lower priced stock that was worth the same as the 5 million current shares. Stupid, immoral and illegal because it was secretive. Illegal because it was intended to deceive shareholders.