Human Capital & Careers

Semtech Options Restatement Totals $91M

Internal review discloses more than ten years of problems with stock-option grants.
Stephen TaubMarch 29, 2007

Semiconductor maker Semtech restated its results for 1996 through 2006 and took a non-cash charge of $91 million ($62 million after tax) following an internal review of its accounting for stock-option grants.

Semtech also filed an amended annual report for the fiscal year ended January 29, 2006, and its delayed quarterly reports for the first three quarters of fiscal 2007, bringing it current in its Securities and Exchange Commission filings. The company also announced that it will file for the automatic 15-day extension to file its fiscal 2007 annual report.

In a regulatory filing, Semtech elaborated that more than $50 million of the charge concerns grants to continuing employees, $19 million concerns grants to new employees, and nearly $21 million concerns post-termination arrangements.

No restatement charges relate to the company’s independent directors or its current CEO or CFO, Semtech stressed.

The company also disclosed that between November 1996 and May 2002, some option grants were made to persons before they became employees. “The appropriate measurement date for these options is the employee’s start date,” it added.

Semtech pointed out that it began reviewing its past options granting practices in May 2006 in light of a third-party report and a letter from the SEC.