Research in motion stock option backdating
Balsillie will remain the company's director and co-chief executive, but has agreed to step down as chairman.
Third, we assess the practice of backdating stock options, as an illustration of the agency problem, in terms of whether the practice is legally acceptable or ethically justifiable.
The commission released a statement on Tuesday saying: "The backdating, which took place between 19, generated an improper gain for employees totaling 66 million Canadian dollars." It went on to say that the respondents in the investigation had offset about half of that amount through repayments as well as canceled and forfeited options. maintained that it had voluntarily disclosed the backdating to regulators in 2006.
Research in Motion stated it was "pleased that the parties have reached an agreement on terms of settlement." R. After an examination by its board, the company incurred 8 million in expenses related to accounting changes caused by improper options grants.
(The administrative problem could be resolved if more companies would hire people with the right skills for stock plan administration, such as those with certification from the Certified Equity Professional Institute at Santa Clara University.) There are also companies, such as Microsoft, that issued options broadly but were concerned that because of the volatility of their stock, an employee who joined the company on one day might get an option grant at a price very different from one who joined a few days earlier or later.
So Microsoft, on the advice of its auditors, issued the option at the lowest price over a 30-day period.
A settlement has been reached between the Ontario Securities Commission and Research in Motion, the maker of the Blackberry, after an investigation into backdating of its stock options, the New York Times reported.