Because the option value is higher if the exercise price is lower, executives prefer to be granted options when the stock price is at its lowest.
For starters, they point out that stock options are a key component of executive compensation, and this is the natural domain of HR.
And, as a practical matter, they add, HR executives probably cannot avoid getting caught in the legal cross fire -- if not taking a bullet directly -- should things go awry, even if they weren't intimately involved: Their superiors will probably blame them, and subordinates will disavow them.
Meanwhile, the scope of investigations into the potential abuse of stock-options grants is expanding from the garden-variety undisclosed backdating, to "spring-loading" grants -- timing them to precede upcoming corporate "good news" presently known only to insiders to maximize their value.
All stemming from the practice known as “options backdating.” Options backdating occurs when a company issues stock options on one date, but reports in its financials an earlier issue date to create a “strike” or exercise price equal to the earlier date’s lower price.
Another consequence is that the company underrepresents the real nature of an executive’s compensation, perpetuating the myth that options are performance-based incentive compensation.