The Cost of the Back-Dating Scandal

From today’s New York Times:

Three researchers at the University of Michigan estimated that backdating stock options between 2000 and 2004 helped sweeten the average executive’s pay by more than 1.25 percent, or about $600,000. But the fallout from the recent options investigations has caused those executives’ companies to fall in market value by an average of 8 percent, or $500 million each.
“For about $600,000 a year to the executives, shareholders are being put at risk to the tune of $500 million,” the study concludes.

This scandal isn’t going to go away. Christopher Cox will be testifying today on Capitol Hill about back-dating.

Posted by on September 6th, 2006 at 11:00 am


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