Alan Jacobs
"Over 100 companies are known to be under investigation for allegedly backdating options to value them at low points in their share prices, and several hundred more have come under suspicion." according to The Economist (Oct. 19, 2006). These back-dating option scandals have already claimed the jobs of executive and directors. What are the current issues in option programs, in particular back-dating? What do companies, their board members and executives need to know when attempting to navigate these waters?
LISTEN: SEGMENT ONE
There are currently 147 companies under investigation for backdating options. Is this an indication of a new trend or is this something that has been around for a long time. Alan and Michael gives us a context of the option programs.
LISTEN: SEGMENT TWO
Michael and Alan explore the investigatory process with us and how it currently evolves through the tiers of investigation. There is an increased urgency for the Board of Directors to perform their own internal investigation to make sure they fulfill their fiduciary responsibilities.
LISTEN: SEGMENT THREE
Who is responsible if fraud or mistakes happen with the option programs. Where is the line between civil and criminal prosecution? Michael outlines the clear cases for criminal but then together with Alan discusses the gray areas where it is not always as clear.
LISTEN: SEGMENT FOUR
How should companies look at using option programs? What are the alternatives that we see companies use in compensating their employees without using the options? Where do we go from here with the option programs? Alan reflects on all these questions as to how companies can still implement these programs.
