A University of Iowa professor’s research helped a major U.S. newspaper win one of the most prestigious prizes in journalism — and has brought down some big names in the corporate world. The Wall Street Journal wrote a series of stories based on research conducted by 38-year-old University of Iowa finance professor Erik Lie. Lie’s research focused on what’s called stock option backdating.
Here’s how it worked — and by the way, it is illegal: corporate executives were given stock as part of their compensation, but the date on the stock certificates didn’t match the date the stock was given to the executive. In many cases, the date on the stock was on an earlier day when the stock was at its lowest price. Lie’s research and the newspaper’s stories led to the firing of some corporate executives who took the backdated stock.
