That, of course, is what is meant by abusive "backdating" in today's parlance.
The purpose of disguising an in-the-money option through backdating is to allow the person who gets the option grant to realize larger potential gains-without the company having to show it as compensation on the financial statements.
He was later given a grant of restricted stock by the company instead.
The practice of “backdating” stock option grants has recently captured the attention of regulators, prosecutors, the plaintiffs’ bar, shareholders and the media.
The SEC’s Enforcement Division and the offices of the United States Attorney are investigating the option granting practices of dozens of companies and actions taken by their executives.
News of the irregularities, which is expected to be revealed in a regulatory filing by Apple before the end of this week, will add to pressure that has been growing on one of Silicon Valley’s most highly-regarded companies since the middle of 2005.
Apple is among more than 160 companies that have owned up to stock option backdating — handing options to executives and other employees at exercise prices that were set in hindsight at favorable levels — a scandal which has led to the departure of a number of chief executives.