GLG News by Quantitative Analysis Academic Specialists

Eli BartovProfessorNEW YORK UNIVERSITY

Stock option grants' backdating and stock prices

April 21, 2006

Analysis of:Next CO2 Worry: Less Absorption | online.wsj.com

Anecdotal and academic evidence indicates stock option grants’ backdating has been widespread in recent years. Many companies have already acknowledged the occurrence of backdating. Others will announce soon. Stock prices responded negatively when companies announce backdating has occurred. There is little doubt that many companies that had been engaged in backdating are yet to acknowledge the problem. However, based on publicly available information investors should be able to identify quite accurately companies that had been engaged in this practice.

Eli BartovProfessorNEW YORK UNIVERSITY

Proposed change in pension accounting and its consequence

April 6, 2006

Analysis of:FASB's Exposure Draft on Postretirement Benefit Plans | www.fasb.org

The new standard will require a company:

a. To recognize in its statement of financial position the overfunded or underfunded status of a defined benefit postretirement plan measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation would be the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation would be the accumulated postretirement benefit obligation.

b. To recognize as a component of other comprehensive income, net of tax, actuarial gains and losses and the prior service costs and credits that arise during the period but pursuant to FASB Statements No. 87, Employers’ Accounting for Pensions, and No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, are not recognized as components of net periodic benefit cost. Amounts recognized in accumulated other comprehensive income would be adjusted as they are subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of Statements 87 and 106.

Page : 11 to 2 of 2