Adobe Systems disclosed in a regulatory filing that the Securities and Exchange Commission has requested more information about the company’s stock-option practices.
In October, Adobe — best known for its Acrobat software — disclosed that a special committee found that adjustments had been made to some option grants after the grant date without a corresponding change to the measurement date. The company added that the committee had uncovered no fraud or intentional wrongdoing.
Adobe concluded that the impact of the stock-based compensation errors was immaterial for all fiscal periods ending prior to the December 2006 fiscal year but was material, on a cumulative basis, to its fiscal 2006 financial statements. As a result, the company recorded a $26.6 million adjustment to its opening retained earnings balance as provided under the provisions of the SEC’s Staff Accounting Bulletin No. 108.
According to Adobe, the staff of the SEC’s Division of Corporation Finance has now asked for more information on qualitative and quantitative factors regarding the company’s SAB 108 materiality analysis.
In November, Adobe announced that Randy Furr resigned as executive vice president and chief financial officer, effective immediately. The company stressed at the time that Furr’s resignation was “unrelated to his work performed at Adobe, and no issues have been raised regarding the integrity of the company’s financial statements.”