Home Depot Sags On Backdating News
Shares of Home Depot slipped in early trading after the world's largest home improvement retailer said on Wednesday it had found almost 20 years of option grant backdating, resulting in about $200 million of unrecorded expenses.
The investigation found that, for annual stock option grants and certain quarterly grants from 1981 through November 2000, the stated grant date was earlier than the actual time the grants were approved, according to Home Depot, adding that in almost every instance the stock price on the apparent approval date was higher than the price on the grant date.
The retailer's independent review, covering its 26 years as a public company and conducted by the audit committee with outside counsel, concluded that there was no intentional wrongdoing by any current member of its management team or board. The company also said that correcting the problem would have no material effect on financial statements.
Home Depot in June said that the U.S. Securities and Exchange Commission had launched an inquiry into its stock option practices. The U.S. Attorney for the Southern District of New York has also requested information, and Home Depot has said it was cooperating with both.
Stock option grant dates have come under the scrutiny of the SEC and the Department of Justice. Some 160 companies have been probed by the agencies or are conducting their own inquiries.