Editor’s Note: Today’s Sunday Arts installment excerpts a post from my very earliest days of blogging. The May 25, 2006 post (here) appeared in a separate and now defunct blog called And Furthermore that I then maintained in parallel with what was then and remains now my principal blog, The D&O Diary.
One of the more interesting stories in the financial pages these days is the news surrounding the options backdating probes. As the options backdating story has continued to unfold, some have questioned whether or not there is actually anything wrong with options backdating. For example, the wsj.com law blog has a May 23, 2006 video post containing a debate between a business school prof and a CNBC reporter on the topic. Options backdating is obviously not harmless — the revelation of options backdating has already proven damaging to at least some of the companies caught up in the probe as they have had to restate their past financials to reflect their true compensation costs. But even beyond the restatement threat, there is a particular reason why the options backdating story has gained momentum in a way that stories about executives’ use of corporate aircraft or gold-plated pensions have not.
Continue Reading Sunday Arts: Cheating at Cards