In theory, it’s fine to offer an employee a backdated stock option — such as one for when a firm’s stock is currently at — as long as it’s accounted for correctly.
Backdating of options dating interracial latin
The Wall Street Journal (see discussion of article below) pointed out a CEO option grant dated October 1998.
The number of shares subject to option was 250,000 and the exercise price was $30 (the trough in the stock price graph below.) Given a year-end price of $85, the intrinsic value of the options at the end of the year was ($85-$30) x 250,000 = $13,750,000.
For instance, if the board meeting is on January 3, 2012, and Company XYZ stock closes at $45 per share that day, then the exercise price of John's 2012 stock are backdated, then his exercise price is only $15 per share.
He pays the $15 per share exercise price and can turn around and sell those shares on the exchange for $50 each, netting a profit of $35 per share, or $35,000.
Those options give John the right but not the on the date of the grant.