Corporate Governance and Backdating of Executive Stock Options

June 2009
Contemporary Accounting Research;Summer2009, Vol. 26 Issue 2, p403
Academic Journal
The article focuses on the relationship between executive stock option backdating and weak corporate governance practices. It states that businesses that granted backdated chief executive officer (CEO) stock option awards had a greater proportion of outside directors hired by the incumbent CEO and a greater incidence of the chair of the board being the CEO, compared to a control sample. It mentions that board members of backdating businesses were more likely to serve on other business boards that also backdate options. It comments that companies that had multiple occurrences of backdating often had significantly greater power and influence of the CEO compared to companies where backdating occurred only once.


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