Options Scandal is a Tax Scam

From Business Law Prof Blog:

The WSJ today has a front page story about "How Backdating Helped Executives Cut Their Taxes." A later section carried the story "Another Consequence of Backdated Options: Stiff Tax Bills." Finally. The essence of the options backdating scandal, backdating either exercise dates or option grant dates, is a tax scam. What is disappointing is the degree to which senior executives in major companies thought that cheating on taxes was legit. The second story, by Theo Francis, explains why so many companies are cleaning up their past back dated options -- a 60% tax penalty that can be avoided if unexcersied, back dated options are repriced before year end.