Stock Options Scandal Rocks McAfee 78
narramissic writes "ITworld is reporting that in the wake of a stock-options investigation, executive shake-up is under way at security software vendor McAfee, including the firing of the company's president. From the article: 'McAfee announced Wednesday that it has terminated the employment of its president, Kevin Weiss. The company's Chief Executive Officer and Chairman George Samenuk is retiring from those roles and the board of directors has appointed Dale Fuller as interim CEO.'"
I'm sensing a pattern here. (Score:3, Insightful)
This might go a long way to explaining why the user constantly gets shafted with their purchases
Re:I'm sensing a pattern here. (Score:5, Insightful)
Re:I'm sensing a pattern here. (Score:4, Insightful)
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I've worked for many different companies, privately owned and public, and I would disagree with this a somewhat; but I would agree that being ruthless and totally pragmatic is an absolute necessity, as is a willingness to play god with people's lives.
I think it's the culture of an organisation which can encourage that sort of ruthlessness, I saw it in one employer (who were
Apple highest profile? (Score:2)
Apple has been dancing around this problem recently, including a firing.
Then again as Spitzer has found, the SEC passed on punishing most corporate crime.
Not quite a board problem (Score:3, Insightful)
You couldn't be sensing a pattern because this isn't a problem with the board. If you read the article you'll find that the problems aren't in the board of directors. They're with executive level management appointed by the board (in this case, the President). If there had been a problem with the board, it would have been extremely strange. In public companies, board meetings literally are gatherings of shareholders who vote their shares on certain issues and also appoint o
Re:I'm sensing a pattern here. (Score:4, Insightful)
This is illegal.
So the authorities started investigating and lo-and-behold, quite a number of tech companies had been backdating their options or commmiting other types of irregularities with their options.
<RANT>
Surprise, surprise - guess that during the last market bust a lot of managers on technology companies where patting each other on their backs and saying to each other "Its not your fault that the share price is going down, it's an industry wide problem and you should still be rewarded for all your hard work". I'm sure they conveniently forgot the fat bonuses they got when the stock prices were going up, even though that was not due to the success of the company but instead due to the bull market.
Now they got caught. I'm sure the favorite excuses are:
- Everybody else was doing it.
- It would be impossible to retain our best people without doing it.
</RANT>
Re:I'm sensing a pattern here. (Score:4, Insightful)
This is illegal.
No, it's not. It's only illegal if you fail to disclose the backdated grants to your shareholders. If you disclose it correctly, it's legal under current SEC regulations.
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And in other news... (Score:2)
Regret (Score:1)
Well, regretting won't fix the problem, and neither will his ousting.
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Is it the CEO's job to make sure that some one doesn't do something squiffy with their stock? I always thought that was the job of security/layers/other people, not the CEO. Doesn't the CEO come up with plans for how to make the company grow/turn a proffit/recover from a scandle?
oh well, I guess I am just not cut out for Co
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* Most public companies, including this one, are not run as democracies. Just as the President is ultimately responsible for all actions of the military, the CEO is ultimately responsible for all business practices in his/her company. Knowing lots of other companies are being investigated a CEO can demand the CFO or others perform an internal investigation and fix any questionable practices. Since stock handling is so critical to public companies it's not unreasonable to expect CEO
Yes, yes and yes (Score:2)
Yes.
Certainly, but blame is placed on the highest level manager anyway (no matter how fair or unfair it may be). In the same sense that the Commander-in-Chief of the United States can be held accountable for the actions of military personnel, the Chief Executive Officer can be held accountable for the actions of the people under him.
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Thank you. Best laugh I've had all week.
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Translation (Score:1)
Well, regretting won't fix the problem, and neither will his ousting.
Translated: "I regret that this came to light while I was still around. Next time I hope to be out of the country before the federales find there was no actual pea in our exclusive executive shell game."
Seriously, what attracts people to these jobs? Money.
What do they try to get even more of than the large, by global standa
Back dating options again? (Score:1)
A little-known fact... (Score:3, Funny)
remember the 90s bubble (Score:5, Insightful)
Instead of earning a regular wage (and getting taxed for it), they were given stocks which encouraged the holders to do what they could to cook the books...
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Err, no. Those scandals had absolutely nothing to do with the backdated options that are at issue here.
I wish I could be a CEO that get's fired. (Score:1, Insightful)
That always gets me: we fuck up and get fired, we get nothing; a CEO gets fired; they get a wind-fall!
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CEOs are hired to be fired. If things go well, they get credit, if things go poorly they get blamed and possibly fired. CEOs (and others) know this when they take a job and it's why they almost always have a severance package in place as part of their contract. You see, most executives aren't hired to do actual work like us peons.
The Crux of the Matter (Score:5, Informative)
Which is where the problem lies in any company that hands out stock options. The trick of "back dating" options so CEOs can cash in on higher returns, coupled with a CEO's knowledge of events in the company, give them unprecedented power to make money off the company's stock while simultaneously causing the company to slide toward oblivion. No one can claim McAfee has exactly been tearing up the anti-virus market of late. Now, having to restate earnings, the stock is threatened with a nose-dive and the other investors are left holding the bag while the defrocked CEOs and Presidents get to walk away with large sums of cash.
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Sarbannes-Oxley requires company officers to personally vouch for the accuracy of financial statements. This has caused companies to put in much more stringent internal controls so that they can ensure accurate reporting. But this doesn't mean filing inaccurate reports was allowed, previously. Nor was back-dating option grants.
--Jon
One has to wonder... (Score:1)
Yet another scandal... (Score:2, Informative)
Sometimes bad news really is bad news.
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Probably not. I gave up trying to figure out the market a long time ago. Remember that for a long time, SCOX kept going up in value while just about everybody in IT knew that they had absolutely nothing. Even after it should have been clear to even the diehards that SCOX's case was nothing but hot air, the stock still maintained its $4.00+ price. In fact, SCOX is now trading at $2.30 a share as I post this and it was a
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The company is just a vector for the flow of money between traders.
KFG
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I'm a MFE stockholder (worked for Trusted Information Systems, had options, TIS went public and was bought by Network Associates, which became MFE...it's interesting to watch, at least) so I've been following this a little. There was a suspicion of a problem for months, which had pulled the price down. Now that it's known what the problem is, and steps are being taken to resolve it, that drag on the price is being cut loose.
As an ex-McAfee employee (Score:1, Interesting)
Which is not to belittle the programmers, developers, network engineers and other technical types; I met some really outstandingly talented technical people there. Just a shame they were crippled by the top layer of dead wood.
Update your signature files (Score:5, Funny)
I don't know who is worse... (Score:1)
hrm.. (Score:2, Insightful)
All you need to know (Score:4, Insightful)
When the CEO and the Chairman of the Board are the same person, you can pretty safely assume that management is running amok. The Board of Directors exists solely to make sure management isn't putting its own interests ahead of shareholders'. When management is the BoD that setup doesn't work so well.
Re:All you need to know (Score:5, Informative)
It's not quite that black and white. If you have competent management, it is GOOD to have them on the BOD (plus a few, perhaps a majority, of disinterested members for checks and balances). Otherwise the BOD doesn't know what the fuck they're supposed to be doing, which is quite often the case. For example, in a private company it is not unusual for the founder to also be CEO and Chariman. Keep in mind, shareholders ELECT the board and as long as your charter gives them reasonable voting rights it should not be able to get too far out of hand. Ideally shareholders should elect a few people who are "in the know", plus a few principal shareholders who are NOT employees, plus a few industry experts who are compensated only for the time in serving on the BOD.
Also board members, be they management or not, have a fiduciary responsibility to shareholders, so if the CEO does something against shareholders interests he is liable. And not just to the tune of whatever personal benefit he may have gained, but jointly for the full damages attributed to malice/fraud on the part of the BOD.
Not the first time... (Score:1, Interesting)
It was just over five years ago that then Network Associates CEO Bill Larson, President Peter Watkins and chief financial officer Prabhat Goyal announced their resignations from the company on the same day that NAI announced a fourth quarter revenue shortfall of $120 million and a new revenue recognition policy for sales through its distributors.
It sucks, at the time the stock went from around 60 to about 10 overnight. I feel pretty bad for my former co-wo
Maybe they'll promote George Kurtz? (Score:2)
I sense a disturbance in the force (Score:1)
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Not Only That! (Score:3, Funny)
Not only that, but I hear he was also running Norton Antivirus on his company PC.
What other scams are out there? (Score:4, Insightful)
What concerns me even more is that this is surely just one of many widely used scams by executive to steal money from the company and shareholders. Obviously this scam had to be replaced with another money maker for executives once the SOX [wikipedia.org] law was passed in 2002. We live in a weird era where executives have complete control over these companies and corporate raiding is the norm.
Oakland Coliseum now? (Score:1)
And in the east bay, the Oakland Coliseum was called "Network Associates Coliseum", but the signs on the highway went to McA
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Either way, it will still 'suck'.
*** rimshot ***
Monster xxxxx, who cares anyway (Score:1)
Concord Pavilion? (Score:1)
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And I've seen some great shows there, back when it was just the "Concord Pavilion".
When the naming rights disease hits NYC.. (Score:1)
Wow! My System Totally Knows! (Score:2)
Of course it did that before the news too...
Dale Fuller? (Score:2)