Home Depot Discloses Long History of Backdating
The Home Depot concluded a four-month long investigation into its stock option practices on Dec. 6. The internal probe revealed that the home improvement company backdated its stock options from 1981 to 2000. "[F]or many of these annual and quarterly grants from 1981 through December 2000, there is insufficient documentation...
December 08, 2006 at 08:42 AM
1 minute read
The original version of this story was published on Law.com
The Home Depot concluded a four-month long investigation into its stock option practices on Dec. 6. The internal probe revealed that the home improvement company backdated its stock options from 1981 to 2000.
“[F]or many of these annual and quarterly grants from 1981 through December 2000, there is insufficient documentation to determine with certainty when the grants were actually authorized by a committee of the board of directors,” according to a company statement about the investigation. The finding stands as the earliest example of stock option backdating.
As a result of its backdating practices, the company has accumulated unrecorded expenses of approximately $200 million, according the statement. The SEC and the U.S. Attorney for the Southern District of New York are both conducting informal inquiries into the company's options-granting practices.
Home Depot announced its investigation in August. A subcommittee of the audit committee undertook the review with the assistance of independent outside counsel, Hogan & Hartson. The review encompassed the entire 26-year history of Home Depot as a public company.
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