CEOs of two tech firms found themselves on the street, the latest casualties
in the long-running stock options debacle.
Security vendor McAfee
named an interim CEO following the resignation of its current
leader while the co-founder of online news company CNet
left his post.
George Samenuk, McAfee CEO and chairman of the board for nearly six years,
announced his early retirement, apologizing for his part in stock options
The retirement is “in the best interests of the company,
shareholders and employees,” Samenuk said in a statement.
“I regret that some of the stock-option problems identified by the Special
Committee occurred on my watch,” Samenuk said.
That committee told the
McAfee board the company will likely need to restate up to $150 million in
non-cash charges based on stock-option expenses spanning 10 years,
according to the company.
McAfee also appointed Dale Fuller interim CEO and president while a search
subcommittee seeks a permanent replacement for Samenuk.
Also losing his job today was Shelby Bonnie, co-founder and CEO of CNet.
Bonnie, chief since 2000, expressed sorrow.
“I apologize for the option-related problems that happened under my
leadership,” Bonnie said in a statement. While the ex-CEO said he felt the
company has addressed many of the problems which occurred between 1996 and
2003, he was “deeply disappointed it happened nonetheless.”
Neil Ashe becomes CEO, the company said.
Bonnie will remain a board director. Today’s resignation follows the
early departures of CNet’s general counsel and head of human resources.
The resignation came as the company released the findings of a special
committee investigating stock options.
Among the findings:
- CNet found “deficiencies with the process,” including backdating of stock options between 1996 through at least 2003.
- CNet executives, including Bonnie, the former CFO, former general counsel
and human resources director “bear varying degrees of responsibility” for
- The former CNet executives have agreed to have improperly priced stock
options re-priced to fair market value based on the appropriate date.
The two ousters follow Monday’s resignation of Andrew McKelvey, chairman,
CEO and founder of online job site Monster.com. William Pastore was named
CEO, according to the company.
Resignation by the three CEOs are simply the latest chapter in a
long-running epic concerning the awarding of stock options to employees.
The practice, allowing executives to buy stock at a time when the value was
lower, can net an employee a few extra dollars but could create a
million-dollar headache for companies.
At its height, some 40 tech companies revealed they were either under SEC investigation or were conducting in-house probes of stock option practices.
In August, three Comverse
executives were fired after being charged with conspiracy to commit fraud to
backdate stock options.
In July, Brocade’s CEO,
along with the vice president of human resources were charged with stock fraud.