Regulators and economists have since specified that "employee stock options" is a label that refers to compensation contracts between an employer and an employee that carries some characteristics of financial options but are not in and of themselves options (that is they are "compensation contracts").
As described in the AICPA's Financial Reporting Alert on this topic, for the employer who uses ESO contracts as compensation, the contracts amount to a "short" position in the employer's equity, unless the contract is tied to some other attribute of the employer's balance sheet.
Gregory Reyes (born September 1, 1962) is an American businessman who most recently served as the Chief Executive Officer (CEO) for Brocade Communications.
He is the first person to have been convicted for fraudulent backdating of corporate stock options.
In 1991–92 he served in the Royal Norwegian Navy and Norwegian Coast Guard.
In 2007, he was listed as one of the Time 100, with the article on his contributions being written by former New York Governor and New York State Attorney General Eliot Spitzer.
Companies would simply wait for a period in which the company's stock price fell to a low and then moved higher within a two-month period.Reyes obtained his first CEO position with Wireless Access, a Silicon Valley start-up company specializing in two-way pagers.Reyes served as President and CEO until Wireless Access was bought out in 1997 by Glenayre Technologies.Erik Lie is a Norwegian finance professor at the University of Iowa who published a report about options backdating that led to many investigations by the SEC into the potentially illegal practice.He was the subject of profile in Business Week for his contribution to uncovering options backdating scandals.Cases of backdating employee stock options have drawn public and media attention.