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Tuesday, 02 January 2007 |
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The options scandal has officially reached Hollywood, as the SEC is probing whether Pixar improperly backdated options before Disney purchased the company. Options given to a number of Pixar execs between 1997 and 2003, including chief creative officer John Lasseter, are thought to be at the center of the inquiry. Probe's ramifications would likely be felt by those who granted the options, not those who received them.
News comes as another Silicon Valley company run by Steve Jobs, Apple, remains embroiled in an options scandal. On Friday the firm revealed it backdated nearly 6,500 options out of 42,000 between 1997 and 2002, but defended Jobs' role in the backdating. Backdated options occur when em-ployees are given options (the right to buy stock at a certain price, usually the market price on the date the option is given) stamped with a date known in retrospect to be the period low for the stock price. This allows the employee to receive a greater benefit from any increase in the stock's price.
While it is difficult to prove, the pattern of a number of execs receiving options with favorable dates suggests backdating has occurred. While backdating isn't always illegal, it can be if it's not disclosed to or approved by inves-tors and the board.
Pixar investigation extends at least back to last summer, when a perusal of company filings revealed Lasseter and Ed Catmull had received options with questionable dating.
Catmull received 1 million options and Lasseter received 2 million on Dec. 6, 2000, at the price of $13.25, accord-ing to SEC filings.
The rest of the story can be read at Variety.com
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