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There is nothing illegal about awarding options at below market price.
So now some companies are changing the other variable in the options equation -- time -- by awarding options with longer terms.
In 2008, Facebook switched from awarding options to restricted stock, but the S.E.C. went so far as to give the company a special exemption to permit this.
In this, it is now generally agreed, executives have been abetted by accounting standards that did not require the cost of awarding options to be treated as compensation and lopped off a company's reported profits.This week, to right this wrong, the International Accounting Standards Board IASBB) unveiled proposals for expensing options, ie, deducting their cost from a company's profits.
In countries where options have been legal for many years, such as Hong Kong and Singapore, companies are awarding options to more and more people.
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Apple disclosed last June that it had awarded options with dates manipulated to make them more likely to pay out.
He was also awarded options for one million shares of Nasdaq stock in 2002, exercisable at $13 a share.
TOTAL VALUE OF EQUITY HOLDINGS The value of shares owned plus the value of previously awarded options that have not yet been exercised.
The company said the inquiry was related to its disclosure that it had awarded options to some executives at below-market prices in three cases before December 2000.
Mr. Stronach's daughter Belinda, who is Magna's chief executive, earned $4.1 million in salary and bonuses last year and was awarded options on 175,000 Magna shares.
Mr. Smith and Mr. Bergère awarded options to themselves and staff members at the lowest December closing prices from 1996 to 2000, instead of at the end of the annual performance and compensation review process, the company said.
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