The options backdating scandal has been affecting companies in various ways. Most recently, for instance, three retailers reported troubles in the area. On Wednesday evening Home Depot announced in its quarterly filing that the SEC had launched an informal inquiry into the company’s option practices. The company also said that the U.S. Attorney for the Southern District of New York has requested information on this subject.
The home improvement giant has also asked its board of directors complete a review of the company’s historical option practices.
Separately, Sharper Image Corp. announced On Thursday morning that its board had launched an independent review of the company’s historical stock-option practices and related accounting matters.
The company reported that a special board committee is conducting the review with the aid of independent lawyers and accounting experts. As a result, the specialty company said it would seek five more days to file its quarterly report for the fiscal period ended July 31, Sharper Image offered assurances that it would meet that deadline.
Finally, Gap Inc. reported in a Thursday regulatory filing that an internal review of its stock option granting practices over the 10-year period ended June 2006 concluded that the compensation expense recorded in its financials is materially correct. “Specifically, we identified no back-dating in connection with the grants of stock options to Vice Presidents and above,” it stated.
The struggling company noted, however, that it found some errors in the dating of option grants to certain lower-level employees. The Gap estimated that the total amount of unrecorded compensation expense over the 10-year period was less than $5 million, calling the amount “not material.”