D.O.A.: Dead On Award
7:00 AM -- There have been numerous stock option investigations in the past few months, mostly related to the sneaky practice known as "backdating." (See Backdating Blues.)
But surely no other company will match the humiliating admission that MSO Cablevision Systems Corp. (NYSE: CVC) has been forced to make.
To cut a long story short, the company has had to restate its 2003, 2004, and 2005 financials because it awarded options to a consultant who wasn't an actual employee, and –- here's the killer -- it awarded stock options to an executive who was, er... dead.
While the options were, in reality, granted after he passed on, they were backdated to when he was still alive! Here's how Cablevision explains it in a Securities and Exchange Commission (SEC) filing dated September 21:
"...two awards of options and one option modification were also incorrectly accounted for as having been granted to employees or modified for employees. One of these two awards was to the Company’s former compensation consultant (which was subsequently cancelled in 2003) and the other award related to an executive officer whose death occurred after the stated grant date of the award and before the actual grant date. The option modification that was incorrectly accounted for related to the options issued to this executive officer."
Such unrivaled cheek raises the still unlikely, but hoped for, prospect that, somewhere in deepest corporate America, a company will reveal it awarded options to its CFO's pet rabbit...
— Ray Le Maistre, International News Editor, Light Reading