Look-back options

When the exercise price of the option is set at a date before the actual grant date. This may be intentional or unintentional. It was recent for stock options which are given out as compensation on a specific date and then dated backward to a time when those options were at a lower value. In that way instant increased value at a previously lower cost is created. It is usually done because the stock price was lower at the earlier date. There can be serious accounting, tax, and securities law issues. So it needs to be adequately disclosed, properly treated for tax purposes (like employee compensation) and properly accounted for.