Bad dating stock option
The next day the hard drive was full again, so I continued with deleting another 5 GB, and once again the next day the disk was full.
After some searching for what caused the disk space to be filled so quickly, I used the That is a file that is generated by the Microsoft Windows Resource Checker (SFC.exe). The CBS.should be generated when the CBS gets to be around 50 meg in size.
Most shareholder approved option plans prohibit in-the-money option grants (and thus, backdating to create in-the-money grants) by requiring that option exercise prices must be no less than the fair market value of the stock on the date when the grant decision is made. For example, because backdating is used to choose a grant date with a lower price than on the actual decision date, the options are effectively in-the-money on the decision date, and the reported earnings should be reduced for the fiscal year of the grant.
(Under APB 25, the accounting rule that was in effect until 2005, firms did not have to expense options at all unless they were in-the-money.
should be copied to cbs.and a new file should be started.
You can try compressing the file: I had a cbs.file of 17 gb , as i was sure that it wasn't me filling up my ssd , i searched for unusual big files in the windows log directory. So, to reset the compression in the CBS folder i've used following method : NOTE: Cleaning up the CBS folder resets the compression process, so the new created log files should not get bigger than 50 Mb before the compression into files as it should be.
(In fact, it can be argued that if these conditions hold, there is little reason to backdating options, because the firm can simply grant in-the-money options instead.)David Yermack of NYU was the first researcher to document some peculiar stock price patterns around ESO grants.Unless corporate insiders can predict short-term movements in the stock market, my results provided further evidence in support of the backdating explanation.In a second study forthcoming in the Journal of Financial Economics (available at Randy Heron of Indiana University and I examined the stock price pattern around ESO grants before and after a new SEC requirement in August of 2002 that option grants must be reported within two business days.The Wall Street Journal (see discussion of article below) pointed out a CEO option grant dated October 1998.The number of shares subject to option was 250,000 and the exercise price was (the trough in the stock price graph below.) Given a year-end price of , the intrinsic value of the options at the end of the year was (-) x 250,000 = ,750,000.Thus, if backdating explains the stock price pattern around option grants, the price pattern should diminish following the new regulation.Indeed, we found that the stock price pattern is much weaker since the new reporting regulation took effect.The graph below shows the dramatic effect of this new requirement on the lag between the grant and filing dates.To the extent that companies comply with this new regulation, backdating should be greatly curbed.ESOs are usually granted at-the-money, i.e., the exercise price of the options is set to equal the market price of the underlying stock on the grant date.Because the option value is higher if the exercise price is lower, executives prefer to be granted options when the stock price is at its lowest.