Kla tencor option backdating
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.
Of course, they may have actually been pushed on their swords by their boards, but let? In the case of Apple, not only did the board send two sacrificial lambs to slaughter, but the feds hung some pretty hefty charges on their necks to boot. VP, General Counsel, and Secretary Nancy Heinen, and former CFO and director Fred D. The SEC's complaintfocuses on the backdating of two large option grants, one of 4.8 million shares for Apple's executive team and the other of 7.5 million shares for Steve Jobs.
Worst case, it happened on Jobs' watch, but he was far enough removed from the action to claim plausible deniability. Broadcom and others fingered the CEO, but that just shows how subjective this issue is.In researching this post, I came across a number of recent reports on Henry Nicholas III, the once high-flying CEO and cofounder of Broadcom. While the story was enthralling, I didn't understand what any of it had to do with a federal investigation into stock option backdating.The allegations of illicit sex, drugs, and rock and roll reminded me of the 60s ... Sure, Broadcom had to take a .2 billion charge to fix the accounting mess left by the company's former executives.Or that an investigation by Disney into options backdating at Pixar also cleared Jobs of any wrongdoing, even though he helped negotiate the deal in which Pixar's star film director, John Lasseter, received backdated options.The bottom line: Claims that Jobs was unaware of the accounting implications of backdating are hardly believable, but there was no evidence to the contrary.I count no fewer than 38 top executives at 19 high-tech companies that have bit the dust over this stuff.We're talking top executives at big-name companies like Apple, Altera, Broadcom, Brocade, Cirrus Logic, Comverse, KLA-Tencor, Maxim, Mc Afee, Rambus, Sanmina-SCI, Take Two, Trident, Verisign, and Vitesse. That's serious fallout considering that options backdating is legit as long as the company reports it and accounts for it accurately.This apparently violates a whole bunch of SEC rules.Heinen also exercised and sold 400,000 back-dated shares.But how does that relate to hiring prostitutes and drugging customers without their knowledge?Said another way, do the feds really need to dig that deep to find enough rope to hang executives with?