Internet news publisher Cnet Networks Inc., security software firm McAfee Inc. and online recruitment service Monster Worldwide Inc. announced the resignation or retirement of their chief executives, all apparently over concerns about how the companies granted stock options.
The three are the latest of at least 135 companies to acknowledge or be investigated for backdating stock options, which typically involves picking dates for stock grants when the purchase price was low, so that when the stock is sold, the holder can make more money. The practice is not illegal as long as the options are properly accounted for on company earnings sheets and tax returns.
According to the Securities and Exchange Commission and the Justice Department, however, a number of companies have not followed the rules. Federal authorities have filed fraud charges against executives at two technology companies, and they continue to investigate many firms.