I don't see how options backdating is tantamount to pilfering the shareholders. It doesn't seem that it affects shareholders much.
While I wouldn't consider it "pilfering", there is most definitely an impact on shareholders in the form of dilution.
Say Acme Widgets had 10 million shares on January 1 , 2001 and shareholder equity of $100 million. Thus, theoretically, each share is worth $10.
After a few years of handing out options with great enthusiasm, Acme now has 20 million shares outstanding on January 1, 2006. Since the company is profitable, shareholder equity has increased to $300 million. Each share is therefore worth $15. Now, that might seem great until you consider that each share could have been worth $30 if no options had been granted.
In this oversimplified example, the shareholder has lost $15 per share in terms of equity. Certainly, we can argue that it would probably not have been possible to achieve the rise in equity without all those hardworking employees and the brilliant CEO to whom the options were granted. But that's another issue altogether. My point is that options most definitely affect the shareholder; if abused, the impact can be huge.
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