Comverse options backdating
Certain practices are more likely to raise red flags than others; grants by unanimous written consent and large grants with long lists of grantees are among such practices.
These guidelines include, among other points, (i) the establishment of a compensation committee; and (ii) the adopting of policies regarding corporate disclosure, insiders and "black-out" periods around earning announcements.
Options backdating contravenes the very nature and purpose of stock option grants.
Originally conceived as a tremendous tool allowing companies to attract talent and reward employees without affecting cash flow, stock options also serve to align the interests of company executives with those of shareholders.
Beyond practices involving the modification of grant documents, the value of options may also be inflated by timing a grant in relation to the release of information that is likely to affect stock price.
For example, "spring-loading" takes place when a grant is authorized prior to the publication of positive information that is likely to cause a rise in stock price.