Stock option backdating bedlam

Now that the dust has settled a bit, we take a closer-look at the recent stock option backdating scandal. Stock option plans have usually been justified by saying they aligned management's interests with those of shareholders. But the authors point out that by backdating stock options, the board of directors weakens the bond between top management and shareholders. What caused this latest financial scandal? Was it one more example of unbridled executive greed? Or was it mostly sloppy recordkeeping? This article examines the issues, and the future implications for companies.