Home Depot Resignations – An Options Connection?
I’ve written before about the latest trend in the options backdating investigations where prosecutors are also targeting General Counsels and other ancillary figures such as HR executives and their compensation consultants (and sometimes the “independent” Directors themselves.) I’ve also written about the self-serving, connected cultures at Home Depot, Computer Associates, the NYSE, and GE that enabled executives that served as managers/Directors at all of them to promote generous compensation packages for each other.
We are also seeing companies more apt to force questionable executives (or executives under question) to resign before the public (and the shareholders presumably via an SEC filing) is aware of their role in an investigation.
Prosecutors consider a CEO the top prize, but those guys don’t go down easy. It often requires the lower level guys to roll on them, accepting lighter sentences in exchange for their cooperation.
The reports today of the resignations of two more high level Home Depot executives, the General Counsel and the VP of HR, beg the question: Are they targets of investigation into even more recent compensation practices and stock options grants at Home Depot?
Home Depot has already had to backtrack once from previous statements last June that put the impact of the “errors” at US$10 million to a statement in December that estimated unrecorded expense of approximately US$200 million. Did long time auditor, KPMG, help outside counsel Hogan and Hartson in its investigations, like they initially did in the Siemen’s bribery case? KPMG and Hogan and Hartson seem to have a good relationship with each other…
Time will tell…