Backdating scandals second
So imagine my surprise when I read this week about the loosey-goosey process United Health used to issue billions of dollars' worth of stock options to top executives over the past few years.According to a report prepared by lawyers at Wilmer Hale, the board of directors and its compensation committee didn't bother keeping good notes about their decisions regarding pay negotiations and stock options.As a result, it is possible that Activision will be required to record additional stock-based compensation expense related to stock-option grants.On June 7, 2007, the company said the SEC issued a formal probe order related to its stock-options grants.After all, stock option backdating is all the rage these days.You'd think they'd be up to their eyeballs in rope.
However, because he continued to argue over the point at which they would vest, Apple missed the deadlines it needed to file the right information with the SEC and its auditors.You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted.That means the company incurs an expense equal to the difference in the share price between the two dates.Here's a look at companies that have come under scrutiny for past stock-option grants and practices.
THIS SCORECARD WAS LAST UPDATED IN SEPTEMBER 2007 AND IS NO LONGER BEING UPDATED. Note: This list contains companies that have disclosed government probes, misdated options, restatements and/or executive departures as of Septmeber 2007.
I count no fewer than 38 top executives at 19 high-tech companies that have bit the dust over this stuff.