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Twenty four hours after FASB issued its exposure draft on stock option expensing, $1.4 billion HR consulting firm Towers released a study showing that a company’s decision to expense stock options has no impact on stock price. The study tracked 335 companies, monitoring their stock price five months before and after their announcements to disclose […]

Executive compensation specialists are reporting that stock option grants will decrease due to FASB’s new stock-option expensing proposal, and will likely be replaced by restricted stock grants. According to two new studies, that trend may already be underway. Compensation analysis firm Equilar, Inc., and compensation consultants Pearl Meyer & Partners each released separate studies last […]

In theory, if an organization is hauled into court and prosecuted, the fine imposed could be substantially less if the organization is deemed to have an effective compliance program in place. But in practice, that rarely happens. In fact, during the decade since the guidelines became effective, only three organizations (0.4 percent) ever received sentencing […]

As noted in prior CW coverage of the sentencing guidelines, actions like self-reporting and cooperating in an investigation could result in reduced charges, lighter sanctions, and even “the extraordinary step of taking no enforcement action.” As a result, the call for cooperation may seems obvious. But there’s a catch. According to securities experts, full cooperation […]

Some compliance officers argue that the federal sentencing guidelines are irrelevant and impossible to implement. Others have noted that the Ad Hoc Advisory Group that recently recommended changes to the guidelines is plagued with conflicts of interest. For example, Advisory Group member Win Swenson—a former deputy general counsel at the U.S. Sentencing Commission—is an advisory […]

Among compliance cognoscenti, the U.S. Sentencing Commission’s “organizational sentencing guidelines” are the Holy Scriptures. Promulgated in 1987 and effective since 1991, the guidelines basically outline the elements of a corporate compliance program, creating a sentencing credit for organizations that put in place “effective programs to prevent and detect violations of law.” Recently, an “Ad Hoc […]

The U.S. Sentencing Commission’s original federal sentencing guidelines listed seven components of an “effective program to prevent and detect violations of law.” However, those elements were listed in the “commentary” (footnotes) of a section on the application of the guidelines. In the new guidelines proposed by an Ad Hoc Advisory Group, those footnotes would become […]

Downloadable version of the FASB proposed statement that would require companies to expense stock options.