Unions question backdating

They may be unions, but they're also major shareholders of some of the companies implicated in the stock option backdating scandal - among them L.A.-based KB Home. The International Brotherhood of Electrical Workers, which holds a $2.1 billion fund, filed a proposal with KB that asks the company to instate holding periods for stock acquired through options. The proposal asks the board "to adopt a policy under which senior executives and directors commit to hold throughout their tenure at least 75 percent of all KB Home shares that they obtain by exercising stock options or receiving other equity-based compensation." That would separate compensation with stock moves (lots of luck getting that through). From Dow Jones Newswires:

"Public pensions and other long-term investors like us, the ones who can't take the Wall Street Walk, are left holding the bag on options backdating," said Dan Pedrotty, counsel in the office of investment at AFL-CIO. While he didn't have any estimates as to how backdating has affected AFL-CIO's $400 billion in pension assets, he said he thinks the options scandals will eventually make a bigger dent in public pension funds than the scandals at Enron Corp. (ENE) and WorldCom Inc. did.