Ethics of stock option backdating Adult xxx date
In a nutshell, we assume systematic participation in options backdating serves as a reasonable indicator of unethical behaviour on behalf of the chief officer.
This allows us to test whether this behaviour is associated with an unethical corporate culture.
This was to minimise the tax burden incurred by the executive receiving new shares of their underlying stock.
One might recall that a great deal of attention was focused on this controversial practice, common in the late 1990s, following a series of articles published by the Wall Street Journal in 2006.
In contrast, a salary doesn't have the same motivating effect.
For example, an employee might not work hard to develop a business when there is no financial benefit to putting in more effort than it takes to simply keep his job.
For example, a generous stock-option package might convince an employee to take a job in a start-up company that can't currently afford to pay high salaries.In short: Anecdotal evidence suggests that these fraudulent firms were often characterised by an unethical culture that permeated a nexus of employees, whose cooperation was necessary to perpetrate extensive corporate malfeasance.For instance, approximately 30 employees at Heathsouth and Peregrine Systems were convicted or pleaded guilty to charges related to financial statement fraud.Our recent research suggests that it may be driven by the actions and attitudes of those at the very top level of corporate leadership – in particular the CEO (Biggerstaff, Cicero and Puckett 2013).Our findings are consistent with a growing literature that emphasises the influence of those in the upper echelons of corporate leadership (Chatterjee and Hambrick 2007, Hambrick 2007).