Apple Computer, Mercury Interactive, McAfee, CA, Affiliated Computer Services, Quest Software, and Comverse Technology, Take Two Interactive...just a few of the recent names added to the list of companies facing scrutiny over their handling of executive stock options. What's notable about this list (and also of the 50 some odd companies under investigation) is the number of technolgy companies, as discussed in the L.A. Times:

"...The technology industry is at the center of this, of course, because stock options long have been the preferred type of compensation for tech executives. In the 1990s shareholders were told, over and over, that even though their stakes in tech companies faced continual dilution because of the huge volume of options granted to executives, the awards were necessary to keep the industry's entrepreneurial spirit alive.

What's more, Silicon Valley leaders fought like mad for a decade to prevent accounting regulators from forcing companies to formally record options granted as a business expense. They finally lost in 2004."

Shades of the early mid-1990s securities class action boom, don't you think? More on the still-growing options story, from InformationWeek.

And credit where credit is due to one Professor Erik Lie of the Henry B. Tippie college of business in Iowa City, Iowa, who as been called the whistleblower (a term he rejects) of the option scandal. Lie published a paper last year examining the manner in which option transactions were handled in the 1990s. Lie sent his research to the SEC, who has proved to be very interested indeed. Lie's website can eb found here.

-- MDT

Labels: Comverse, Mercury Interative, Quest