That concealed the additional executive pay and overstated financial results.
Given these factors, share options often represent the largest component of remuneration to top management.The critical dates for share option schemes are the date of grant and the date of exercise, which usually determine the price which the employee is able to acquire the shares, as well as the quantum of the ‘gain’ for tax purposes.Some plans confer employees with the right to acquire the shares directly, whilst other plans may only entitle employees ‘phantom shares’, as they only confer upon employees the right to cash benefits which are benchmarked against the performance of the company.A total of 181 lawsuits alleged that executives were overpaid through improperly timed stock-option awards at companies, including United Health Group and Broadcom A settlement in the final suit, involving fiber-optics supplier Finisar, was approved last month.The settlements cost companies and their executives, auditors and advisers a combined $7.3 billion, Audit Analytics said.And despite concerns that auditors should have caught some of the backdating, corporate audit firms were named as defendants in just 13 cases.
They have paid about $97 million of the total settlements costs so far.
The Securities and Exchange Commission filed 32 of the cases, including one against William Mc Guire, the former CEO of United Health, that resulted in a $468 million settlement. Mc Guire didn’t admit or deny any wrongdoing in the settlement.
“If you filed a restatement that was obviously more apt to cause litigation,” said Donald Whalen, director of research at Audit Analytics.
The Office of General Counsel issued the following informal opinion on November 26, 2001, representing the position of the New York State Insurance Department.
Are there any statutes or regulations that govern the issuance of certificates of insurance for commercial general liability policies?
Giving retroactive value to purchases from the earlier date.