" Stock options have been a proxy for corporate accountability.
It has taken decades of debate to achieve basic option-expensing rules.
Companies used to grant the option, wait until the stock price reaches its lowest level within that time, and then date it at that price.
Nowadays, backdating is no more practically possible, as companies are required to report option grants to authorities within a very short period of time (typically two business days).
The artificially increased earnings, in turn, enable executives to covertly enlarge their bonuses and boost their profits from selling the stock.
Historically, practicing backdating was possible because reporting the issuance of employee stock options to concerned authorities (such as the SEC) was allowed to take place within a relatively long period of time (two months) after the actual grant date.
First, these companies are accused of manipulating the grant date around the release of material non-public information.