Monster Worldwide , the parent company of online job site
Monster.com, said it will take a $339.6 million charge to pay for
stock-option grants that former employees “intentionally” recorded incorrectly
between 1997 and March 31, 2003.
The announcement follows the resignation of Monster’s CEO and other top
executives, as well as the formation of a special committee to investigate the
company’s practice of issuing stock-option grants.
“The company believes that this practice was done intentionally, by persons
formerly in positions of responsibility at the company for the purpose of
issuing options at a higher intrinsic value than would have otherwise been
the case,” concluded a report from a the committee formed in June.
Monster also said Wednesday it filed with the Securities and Exchange
Commission (SEC) amended financial reports for 2005, as well as March and
June 2006. Along with a soon-to-be filed quarterly report for Sept. 30,
2006, the amended reports satisfy requirements for Monster stock to remain
listed by NASDAQ.
Recommendations are expected during the first quarter of 2007 on what steps Monster can take to prevent future problems with stock-option grants.
A Monster spokesperson was not immediately available for comment.
The company’s board of directors in a statement called the stock-option practices “contrary to the high ethical standards” that should be used by companies.
The final report by the internal investigation follows the November firing
of Myron Olesnyckj, the company’s senior vice president, general counsel and
secretary who was suspended in September pending the results of Monster’s
stock-option probe.
Monster’s founder, CEO and chairman, Andrew McKelvey resigned in October.
Monster isn’t alone in being forced to restate earnings as a result of
incorrect recording of stock-option transactions. Internet security company
VeriSign
restated as much as $250 million last month because of what the vendor
termed “incorrect measurement dates” for 2001 to 2005.
Along with Monster’s founder, stock-option questions claimed
the CEOs of McAfee and CNet.
Monster shares were down 1.06 percent in afternoon trading.
