George
Samenuk, the chief executive of security firm McAfee, and Shelby
Bonnie, chief executive of technology publisher CNet Networks, left
their jobs after investigations by their companies into allocations
of stock options.
Bonnie will retain his seat on the CNet board. Two other CNet
executives also resigned following the investigation which found
that a series of executives bore "varying degrees of responsibility
for these deficiencies".
It has emerged that a number of Silicon Valley companies have
operated policies of backdating stock options. Options are the
right to buy shares in a company for the price of the share at the
time the option is issued. If the share price rises the difference
is pure profit for the option holder. They have become a
significant part of the technology world's pay structure.
Because technology share prices have generally risen over time,
backdating options effectively makes them more valuable to the
holder. Though commonplace, the practice is just now coming to
light and enraging shareholders and analysts.
The scandal has so far involved 120 companies, most of them
technology firms, including household names such as McAfee and
Apple Computer.
The scandal has major implications for the balance sheets of the
companies involved. McAfee said that it would restate 10 years'
worth of earnings at a cost to the company of $100 million to
$150m.
"I regret that some of the stock option problems identified by
the special committee occurred on my watch," said a statement from
McAfee's Samenuk. "I am proud of the accomplishments of the McAfee
team in serving our millions of customers during my tenure."
"I apologise for the option-related problems that happened under
my leadership," said CNet's Bonnie.
The resignations and firings have come as a result of internal
investigations, but there are some government investigations taking
place.
The biggest name to be involved in the scandal so far is Apple
founder and chief executive Steve Jobs, who said earlier this month
that he had received backdated options which had given him an
immediate profit on paper. An internal company review said that he
had not acted improperly.
