Consequences of options backdating Best skype cam sex model
It’s fraud when options are backdated without telling shareholders or when companies change documents such as board meeting minutes or board approvals to support the backdating.
But beyond the obvious fact that the income tax code discriminates in favor of non-salary compensation that can be taxed as capital gains, one of the most significant reasons that non-salary forms of compensation have ballooned since the early 1990s is the $1 million legislative cap on salaries for certain top public company executives that was added to the Internal Revenue Code in 1993.
As a Member of Congress at the time, I well remember that the stated purpose was to control the rate of growth in CEO pay.
There are other accounting and tax reasons, as well, that stock options over the years were increasingly included in the compensation packages of executives and non-executives.
Beginning in 1972, the accounting rule was that employee stock options wouldn't have to be shown as an expense on the income statement-so long as the terms were fixed when the option was granted, and so long as the exercise price was equal to the market price on that day.
Very recently, we enacted new rules that will require, beginning with the next proxy season, the full disclosure of all aspects of executive and director pay and benefits.
A key component of that disclosure will be compensation in the form of stock options, which has been a fast growing portion of executive pay since the early 1990s.
And public companies guilty of backdating may violate federal securities disclosure and reporting requirements, exposing themselves to regulatory or criminal investigations as well as securities fraud litigation.
If you decide to award backdated stock options, contact us about how to do it the right way.
With complete hindsight, we can now all agree that this purpose was not achieved.
Indeed, this tax law change deserves pride of place in the Museum of Unintended Consequences.
Rather obviously, this fact pattern results in a violation of the SEC's disclosure rules, a violation of accounting rules, and also a violation of the tax laws.Tags: Adult Dating, affair dating, sex dating