Feeds

CA reveals decade of options miscues

Accounting challenged

Boost IT visibility and business value

CA has admitted it held on to employees' shares for up to two years after awarding workers the options, helping the company boost its profitability for Wall Street.

The software giant has been forced to wipe $342m off its profits for the years 1996 to 2006 following a re-statement of earnings in the wake of an internal review. The $342m represented costs to CA that were hidden through the delayed options allocations.

CA made the admission as it filed delayed results for fiscal year 2006. The company reported $3.79bn in revenue for the year, $20m higher than expected.

The results had been pushed back as CA assessed the impact on current and past years' performance caused by the backdating of share options. CA's statement came as FBI and financial regulators comb through the books of nearly 100 public US companies, including many well-known Silicon Valley names, looking for evidence of backdated share options.

CA said its own review into share allocations had found a "number of cases" before 2001 where shares approved by the board of directors' compensation committee were not handed over to employees at the time of the award.

"The communication of these grants by management to individual employees was not made until some time after approval by the compensation committee, in some instances, up to two years later," CA said.

"In almost all cases, the exercise price set at the time of the committee's approval was lower than the market price of the company's common stock on the date the aware was formally communicated to employees," according to CA. The practice changed in 2001, and grants have been "communicated promptly after their approval" since fiscal year 2002.

CA has been trying to claw its way past an existing accounting scandal. A number of former executives have admitted to fraud in a scheme where CA used a "35-day month" to pad extra revenue onto quarters. The company changed its name from Computer Associates to CA in an effort to shift away from this past.

With just C and A left to play with, the company has limited rebranding options if it hopes to use a similar tactic to deal with the latest accounting incident. Here's hoping a cleaner decade won't make such a move necessary. ®

Build a business case: developing custom apps

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.