This is a way of repricing options to make them valuable or more valuable when the option "strike price" (the fixed price at which the owner of the option can purchase stock) is fixed to the stock price at the date the option was granted.

Cases of backdating employee stock options have drawn public and media attention.

An example illustrates the potential benefit of backdating to the recipient.

The Wall Street Journal (see discussion of article below) pointed out a CEO option grant dated October 1998.

Some executives have, well, at least when it comes to their stock options.

This is the granted option that would be reported to the SEC.In this way, the exercise price of the granted option can be set at a lower price than that of the company's stock at the granting date.This process makes the granted option in-the-money and of value to the holder.This article will attempt to provide reasons why this issue is important, why civil and criminal authorities are investigating, and why it is critical that public companies who issued options over the past...ESOs are usually granted at-the-money, i.e., the exercise price of the options is set to equal the market price of the underlying stock on the grant date.(Under APB 25, the accounting rule that was in effect until 2005, firms did not have to expense options at all unless they were in-the-money.Options backdating is the practice of altering the date a stock option was granted, to a usually earlier (but sometimes later) date at which the underlying stock price was lower.