Feeds

CA reveals decade of options miscues

Accounting challenged

Build a business case: developing custom apps

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
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.