In today’s Wall Street Journal, Holman Jenkins continues to wage war against his own paper’s page one editors. We’ll save for tomorrow any discussion of two important points that Holman raises—the immateriality of stock options backdating and the mostly likely reason it occurred—and instead give you the good news: it looks like the war against the war against backdating is making progress. To put it differently, at least some newspapers seem ready to back off the lynch mob mentality that initially gripped the business media when the Journal went public with its allegations.
With care and precision, the San Jose Mercury News characterizes the scandal: "Stock options were designed as a form of incentive-based compensation; backdating to a lower price is legal only if it is properly disclosed and accounted for by the company."
Says the New York Times: "Backdating options is not necessarily illegal, but the practice can raise serious accounting, disclosure and tax issues."
These are refreshing correctives to presumptions that continue to linger in certain media accounts -- that backdating necessarily implies excessive or "stolen" compensation; that backdating violates the "rationale" for using stock options to attract, retain and incentivize employees.
Why such canards persist in the coverage is itself a bit of a mystery, but editors have their reasons. A more important question now is whether prosecutors will be able to scale their efforts to the actual nature of the wrong rather than the inflated version in some media reports. This question may be the hinge on which justice turns.