Does backdating explain the stock price pattern

Options backdating is the practice of altering the date a stock option was granted, to a usually earlier (but sometimes later) date at which the underlying stock price was lower.

This is a way of repricing options to make them valuable or more valuable when the option "strike price" (the fixed price at which the owner of the option can purchase stock) is fixed to the stock price at the date the option was granted.

According to a study by Erik Lie, a finance professor at the University of Iowa, more than 2,000 companies used options backdating in some form to reward their senior executives between 19.Does backdating explain the stock price pattern around executive stock option grants?Abstract Extant studies document that stock returns are abnormally negative before executive option grants and abnormally positive afterward. Because stock options are generally granted at the money, past researchers attribute the stock return pattern to opportunistic timing of either grants or information releases around grants. Lie / Journal of Financial Economics 83 (2007) that the returns are abnormally low leading up to the grants.

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