Stock Options for Good or Evil

Stock Options for Good or Evil

  • Submitted By: ramose2
  • Date Submitted: 12/11/2008 5:53 PM
  • Category: Business
  • Words: 558
  • Page: 3
  • Views: 450

RUNNING HEAD: Stock options for good or evil. Eva Mollinedo Bus670: Legal Environment Steve Wehling March 23,2008 Ethics reform is at the heart of the business community right now. Many companies are being recognized not for their success in the business world but rather being scrutinized for their faulty and deceiving accounting practices. There is an even more popular scandal that is ready to plague the corporate world. That of stock options for the top executives of companiesas part of their compensatory package. There is also some discussion of whether backdating and repricing is an acceptable practice in corporate America. The debate lies in the fact that not only are corporate executives enjoying eye popping compensatory packages but now even when their corporation is performing poorly they are still basking in their vested stock interests when they go to resign from the company that they failed to manage effectively. What are the ethical implications in using stock options as a compensatory and retention package for some of the top executives and are there legal implications to the backdating and repricing of those options? This paper is an examination of the practice of using stock options to entice corporate executives and the practice of backdating and repricing as a way of retaining them. Or better yet. Why not foster an enough is enough mentality in corporate America? Just make the decision that we will be offering said compensation for their services. One thing is for certain that there would not be the existence of stock options as a package if not for the never-endinggreed that certain careers are fostering. Why not pay the CEO the way that 98 percent of America earns their money and this is by offeringthem an employment package without all of the perks. This would eliminate the issue of stock options and how to find the loophole that would help find the way to maximize the earnings of the corporate CEO. In closing , we return to the issue...

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