The Agency Problem: Options Backdating

The Agency Problem
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Options backdating is the method in which the date when a stock option was granted is changed to an earlier or later date at which the underlying stock price was typically low. In the case of Omnitech, we have to say that the company has historically granted stock options at the money; this means the price of the exercise is equal to the fair market value of the stock on its grant date.
The company took the services of Valuchev, considering that he would bring it to the peaks of success. In the beginning, the board could not attract him with salary alone but had to offer stop options and a bonus depending on hi...