Thoughts on minimizing option risk.

• Author: Marshall, Jeffrey
• Position: STOCK OPTIONS - Brief article - Conference notes

There is good news on the stock option scandal front: as a rule, companies caught up in the investigations haven't seen a material hit to their stock prices. That's probably because the problems don't involve cash and aren't viewed as operational, notes corporate defense attorney Brian E. Patuszenski.

Patuszenski, a partner at law firm Goodwin Procter LLP, offered thoughts and advice about the option imbroglio during a February webcast. In general, he stressed that companies should have an open, easily understood approach to issuing options that is documented and defensible. For instance, he urged companies to:

* issue options only on fixed dates, such as immediately after an earnings release;

* finalize delegation of grant authority to provide clear oversight; and

* make sure that grants are issued only in meetings for which minutes are taken.

Patuszenski also strongly urged companies to consider issuing...