The effects of stock options on markets

Abstract

Steve Jobs, Apple Chief Executive Officer (CEO) recently apologized for his company's past stock-option practices. Indeed, a three-month investigation by Apple's board of directors found that the company had backdated option grants made between 1997 and 2002. A number of companies have been embroiled in the growing controversy over the practice of backdating, or allowing employees to be granted stock options dated from an earlier time, when the trading price of the options was lower.