Exchange Currency

spring loading

Waiting to grant an employee stock option until just before good news about the company reaches the market. Because the strike price of the option is tied to the day it is issued, waiting until before good news hits the market increases the value of the option. Once the market reacts to the news by pushing the stock price higher, the employee can exercise the option at the lower strike price. This options dating technique is criticized because it often only benefits the executives granted the option, not the shareholders.

Related information about spring loading:
  1. Spring Loading Definition | Investopedia
    An option-granting practice in which options are granted at a time that precedes a positive news event. Spring loading relies on the fact that positive news ...
     
  2. Is Spring-loading Wrong? - Compensation - CFO.com
    Sep 6, 2006 ... Testimony on Capitol Hill today did nothing to resolve the ongoing debate over whether spring-loading of stock options is illegal or unethical.
     
  3. What is spring loading? definition and meaning
    Definition of spring loading: Waiting to grant an employee stock option until just before good news about the company reaches the market. Because the strike ...
     
  4. Financial Rounds: A Primer on "Spring-Loading" and "Back-Dating ...
    Jul 8, 2006 ... Note: Welcome to all the visitors from TheStreet.com - I'm glad you're here. Feel free to look around a bit and see if there's anything else you ...
     
  5. The Returns to Spring-Loading by Rik Sen :: SSRN
    Mar 9, 2008 ... Abnormal returns following public disclosures of unscheduled grants to CEOs are positive and highly significant in the post Sarbanes Oxley ...
     
  6. 'Spring-Loading' Executive Stock Options: An Abuse in Need of a ...
    Jun 12, 2009 ... Spring-loading” describes the practice where a corporate executive receives stock options shortly before the release of favorable company ...
     
  7. Accounting Rules Allow “Spring-loading,” “Bullet-dodging” Option ...
    Oct 6, 2006 ... The government will not have any accounting basis for enforcement actions against companies for “spring-loading” or “bullet-dodging” stock ...
     
  8. Investigation Spreads to Spring-Loading Executive Stock Option ...
    Jun 6, 2006 ... Individuals familiar with the rapidly expanding investigation into executive stock options grants have told Reuters that the practice of ...