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MORE OPTION LUCK UNRAVELS

May 23, 2006

The Wall Street Journal continued to advance the story of backdated executive stock options ($link). The WSJ fingered 15 more companies whose executives managed in an absolutely uncanny way to have their options priced the Wal-Mart way: always the lowest price.

If the executives were just that lucky, they had an honorable way of saving millions of dollars in stock exercise costs. Of course, the suspicion is quite strong that it wasn't just luck, and that options were in fact backdated. If that's the case, their employers stand to lose millions of dollars in deductions.

The WSJ shows a number of examples of this amazing luck, and the odds of such low option prices happening purely by chance. A sample of their charts:

(Source: Wall Street Journal)

Take these guys with you next time you go to Prairie Meadows to play the ponies.

Prior Tax Update coverage starts here.

UPDATE: The WSJ Law Blog has a subpoena scorecard.

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