Daniel Shaviro analyses the proposal: Even if you like the
Daniel Shaviro analyses the proposal: Even if you like the $1 million limit, and few people do, this is just silly.All one needs to do to avoid it is have a virtual stock option instead of a literal one.||
Daniel Shaviro analyses the proposal: Even if you like the $1 million limit, and few people do, this is just silly.million limit, and few people do, this is just silly.
As detailed in a prior post (here), on February 6, 2008, plaintiffs’ lawyers announced (here) that they had initiated a securities class action lawsuit in the United States District Court for the Northern District of California against Maxim Integrated Products and certain of its directors and officers.One possible explanation is that everyone in Silicon Valley at the time was so convinced in the potency of options that the possibility of illegality was not even contemplated.After all, the accounting rules did not even count options as a cost of doing business—unless, as it turned out, they were backdated.Next month Greg Reyes, the former boss of Brocade Communications, will be sentenced following his conviction in August on fraud charges relating to options backdating.(Backdating refers to retrospectively picking a favourable date to set the price of an option, when the firm's share price is at a low point, rather than using the price on the day the option is actually awarded.) He faces up to 20 years behind bars, unless the newly launched Friends of Greg Reyes campaign convinces the authorities that he has been the victim of a miscarriage of justice.