This instant paper gain was equivalent to extra compensation and was thus a cost to United Health Group.
United Health Group, however, failed to include the costs associated with this extra compensation in its financial results, and thereby overstated its profits. Hemsley and others, the total value of which is approximately 5 million (Black Scholes) or 0 million (intrinsic). In approving the settlement, the Court found:"Plaintiffs' Counsel spent significant time and labor prosecuting this lawsuit.
Law360, New York (December 14, 2007, AM EST) -- Wireless communication company American Tower Corp. Financial Services Law360 UK provides breaking news and analysis on the financial sector.
has settled a class action over stock options backdating, agreeing to give its shareholders million to drop the case. Coverage includes UK and European Union policy, enforcement, and litigation involving banks, asset management firms, and other financial services organizations.
Financial Services Law360 UK provides breaking news and analysis on the financial sector.
Coverage includes UK and European Union policy, enforcement, and litigation involving banks, asset management firms, and other financial services organizations.
It was forced to restate earnings by recognizing a stock-based expense increase of 3 million between 19, after allegedly manipulating its stock options grants for the benefit of its senior executives.Additionally, companies can use backdating to produce greater executive incomes without having to report higher expenses to their shareholders, which can lower company earnings and/or cause the company to fall short of earnings predictions and public expectations.Corporations, however, have defended the practice of stock option backdating with their legal right to issue options that are already in the money as they see fit, as well as the frequent occurrence in which a lengthy approval process is required.In a statement released Thursday, American Tower said the settlement would resolve all the claims against the company and two of its top executives, if approved by the Massachusetts district court. The Boston-based company said it would continue to negotiate with its insurers about their contribution to the settlement.
Sometimes certain claims (such as insurance claims) can be backdated if the could not be completed at an earlier date, although there must be good reason for neglecting to claim in advance.