June 2007 Vol. 105 No. 8 THE REVIEW
ARTICLES

The Economic Impact of Backdating of Executive Stock Options

M. P. Narayanan, Cindy A. Schipani, & H. Nejat Seyhun

This Article discusses the economic impact of legal, tax, disclosure, and incentive issues arising from the revelation of dating games with regard to executive option grant dates. It provides an estimate of the value loss incurred by shareholders of firms implicated in backdating and compares it to the potential gain that executives might have obtained through backdating. Using a sample of firms that have already been implicated in backdating, we find that the revelation of backdating results in an average loss to shareholders of about seven percent. This translates to about $400 million per firm. By contrast, we estimate that the average potential gain from backdating to all executives in these firms is about $500,000 per firm annually. We suggest some remedies not only for backdating, but also for other dubious practices such as springloading.

  READ MORE    //  VIEW PDF

Fixing 404

Joseph A. Grundfest & Steven E. Bochner
READ MORE    //  VIEW PDF

Rewarding Outside Directors

Assaf Hamdani & Reinier Kraakman
READ MORE    //  VIEW PDF

The Corporate Monitor: The New Corporate Czar?

Vikramaditya Khanna & Timothy L. Dickinson
READ MORE    //  VIEW PDF

SOX and Whistleblowing

Terry Morehead Dworkin
READ MORE    //  VIEW PDF

A Business Ethics Perspective on Sarbanes-Oxley and the Organizational Sentencing Guidelines

David Hess
READ MORE    //  VIEW PDF

The Social Construction of Sarbanes-Oxley

Donald C. Langevoort
READ MORE    //  VIEW PDF

Sarbanes-Oxley and the Cross-Listing Premium

Kate Litvak
READ MORE    //  VIEW PDF

Getting the Word Out about Fraud: A Theoretical Analysis of Whistleblowing and Insider Trading

Jonathan Macey
READ MORE    //  VIEW PDF

The Use of Effficient Market Hypothesis: Beyond SOX

Dana M. Muir & Cindy A. Schipani
READ MORE    //  VIEW PDF

What's Good for the Goose Is Not Good for the Gander: Sarbanes-Oxley-Style Nonprofit Reforms

Lumen N. Mulligan
READ MORE    //  VIEW PDF
NOTES

When Courts Shouldn't Take the Initiative: Section 2 of the Voting Rights Act, Initiative Petitions, and Operation King's Dream

Francesca Ambrosio

Well after the end of the Civil War, the abolition of slavery, and the passage of the Fifteenth Amendment, many African Americans were still unable to effectively exercise their right to vote. Finally, in 1965, Congress sought to remedy this situation by passing the Voting Rights Act (“VRA”). The bill was dramatic and controversial, but commentators hail it as one of the most effective pieces of legislation of the civil rights movement.

  READ MORE    //  VIEW PDF

Now, Later, or Never: Applying Assymetric Discount Rates in Nuisance Remedies and Federal Regulations

Yang Wang
READ MORE    //  VIEW PDF

Secondhand Smoke Signals from Prison

Scott C. Wilcox
READ MORE    //  VIEW PDF
& Other Current Events

Crawford v. Washington: A Ten Year Retrospective

No one disputes the significance of Crawford v. Washington, 541 U.S. 36 (2004), which fundamentally transformed Confrontation...

Come Back to the Boat, Justice Breyer!

I want to get Justice Breyer back on the right side of Confrontation Clause issues. In 1999, in Lilly...

Crawford v. Washington: The Next Ten Years

Imagine a world . . . in which the Supreme Court got it right the first time. That is,...

The Crawford Debacle

First a toast-to my colleague Jeff Fisher and his Crawford compatriot, Richard Friedman, on the...

Confrontation and the Re-Privatization of Domestic Violence

When the Supreme Court transformed the right of confrontation in Crawford v. Washington, the prosecution...
MAILING LIST
Sign Up to Join Our Mailing List