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Options backdating: does a corporation's non-cash restatement of finances hurt shareholders?

In light of the many options back-dating scandals in the press, I'm wondering: When a corporation makes a non-cash restatement of its finances to properly account for employee stock options that had been awarded at below-market prices, is that a loss to the shareholders? With all the tech companies restating their finances in the options back-dating scandals, I am wondering if and how shareholders are hurt by this? If the employees made greater profits on their stock options due to back-dating, how does this harm the (current or past) shareholders, if at all?

Public Comments

1. ah ... the value added when this is done was an expense to the then shareholders [and taxable income to those who received them]. this reduces EPS and thus the growth rate of EPS -- and therefore the price increase potential of the shares. not to mention the lying that obviously took place. Personally, I think the Directors who approved these illegal transactions should be fined an amount equal to the value they illegally gave away.