Human Capital & Careers

Home Depot Faces SEC Options Probe

The commission is looking into the disconnect between the dates some option grants were awarded and the dates used to determine the stock-option ex...
Stephen TaubJune 26, 2006

Home Depot disclosed Friday that the Securities and Exchange Commission has launched an informal inquiry into its stock-option practices.

The home-improvement retailer stated that it intends to fully cooperate with the SEC. The company does not expect the inquiry to have a material adverse effect on its consolidated financial position or its operations.

On June 16, Home Depot announced that it had uncovered five instances in which the date an option grant was awarded, by a board committee or the full board, was later than the date used to determine the stock-option exercise price. In three of those five instances, added the company, the market price of the company’s stock on the award date was higher than on the date the exercise price was determined.

According to Dow Jones, the five misdated options were awarded between May 1999 and August 2000.

Home Depot estimated that the unrecorded expense over the affected period did not exceed $10 million.

Also on Friday, Xilinx disclosed that the SEC is conducting an informal inquiry into the company’s stock-option practices. The chipmaker added that it is cooperating with the commission.

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