Lam Research Corp. said it has launched an internal review of its accounting and reporting related to employee stock-option grants and the procedures that government them.
The Fremont, Calif.-based supplier of tools for making microchips said the review arose after its independent auditors, as part of the fiscal 2007 year-end audit, followed recent guidance from the Public Company Accounting Oversight Board in examining the company’s historical option granting programs and procedures. It added that questions have arisen about whether appropriate accounting measurement dates were selected for certain employee grants between 1999 and 2002.
Lam said its directors appointed a committee of two independent board members to conduct the review, and that the committee hired an outside legal counsel to assist with the review. The committee will determine the scope of the voluntary review.
The company stressed that it has not yet determined whether it needs to record any non-cash adjustments to compensation expense related to prior stock option grants.
“From the initial release the wording doesn’t seem to indicate a major problem,” Needham & Co analyst Robert Maire told Reuters. More than 180 companies have been investigated by U.S. authorities or have conducted their own internal probes into option backdating, or other manipulation of stock option grant dates, the wire service said.