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Monday, October 16, 2006The stock options scandal claimed its biggest corporate chief Sunday, with UnitedHealth Group Inc. saying Chairman and Chief Executive Officer William McGuire would step down because an outside report found that his option grants "were likely backdated." ...The report by a firm hired by the company's board said McGuire's huge awards of stock options got a boost because they were issued on one day but priced as if they'd been issued earlier, when the stock price was lower. Does that mean they're really worth only millions instead of billions? posted by Sydney on 10/16/2006 09:57:00 PM 2 comments 2 Comments:
The problem goes deeper than Dr. McGuire. We now have over 100 companies under investigation for back dating stock options. We have a former, short term, FDA commissioner under investigation for conflict of interest. The WSJ recently highlighted a university president for his lavish spending on housing renovations, entertainment expenses, and his wife's marijuana smoking. By 7:36 AM , at
That article is pure fearmongering. Options back-dating is perfectly legal, ethical, and above-board. The strike price of stock is an arbitrary number that the company just pulls out of thin air. If a company chose, they could perfectly well roll dice to come up with the strike price, or pick something fun like 14 head of Texas longhorns per share. By 12:51 PM , at |
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