The consequences of backdating executive stock options

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Although designed to increase the use of stock options as a compensation vehicle (1984) and decease the loss of knowledge workers (2000), we argue that these tax changes were largely ineffective and perhaps unneeded. Higher education loans and tax evasion: A response to perceived unfairness.

Further we demonstrate the negative unintended consequences of these actions, specifically that they reward the backdating of employee stock options and promote tax evasion, and discuss the policy implications of these unintended consequences.

Isuma: Canadian Journal of Policy Research, 1(1), 101-110.

The brain drain: Myth and reality - what it is and what should be done. You exercise the incentive stock options but hold the stock: In this situation the difference between the grant price and the market price then becomes an AMT preference item, so exercising incentive stock options might mean you’ll pay AMT (alternative minimum tax).You can get a credit for excess AMT tax paid, but it may take many years to use up this credit. Siskinds research spurs options back-dating action: Canadian public companies examine their practices. Retrieved from research spurs options back dating action/2668927/Narayanan, M. The economic impact of backdating of executive stock options.

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