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Backdating Costs Investors 8% Per Share: Survey

Law360 (September 6, 2006, 12:00 AM EDT) -- Backdating of options issued to executives cost shareholders a stunning 8% per share, or almost $500 million on average for the companies involved, a recent university research paper concludes.

The paper, written by M.P. Narayanan, Cindy A Schipani and H. Nejat Seyhun of the M. Ross School of Business at the University of Michigan, examined a sample of firms that have already been implicated in the backdating scandal. (Editor's Note: The full report is attached below, courtesy of the authors.)

Stock options grants are not necessarily...
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