Steve Jobs did not benefit from the discontinued practice of stock-option backdating at Apple, a company board committee led by board member and former Vice President Al Gore reported at the end of December.While Jobs approved back-dated options for others, the committee said he did not "appreciate the accounting implications." Apple restated its earnings as part of a filing with the Securities and Exchange Commission (SEC), dropping their previously stated figures over a period that stretches back as far as 1998 by 5 million before tax, or million after tax. Backdating is the practice of marking a document with a date that precedes the actual date. Backdating definition of backdating by The Free Dictionary.
One of the more common situations where options backdating takes place is in assigning shares of company stock to employees.
The options gained .7 million in value within one day of being issued due to news of the Microsoft investment.
The practice of backdating options does not materially affect companies, because the expense associated with option grants isn't an outlay of cash.
In terms of arranging the paperwork, the issuer will make use of the actual date associated with the price used in the transaction.
This means that even though the shares were assigned on 31 December, the options backdating process requires that the documentation carry the date of 1 December, effectively justifying the price used in the transaction.