Stock-option woes take down McAfee, CNet execs
The Associated Press
SAN FRANCISCO – The chief executives of McAfee and CNet Networks stepped aside today to atone for stock-option chicanery that occurred on their watch, expanding the list of business leaders swept up in a messy scandal that is erasing profits and spurring government investigations.
McAfee, a leading maker of anti-virus software, parted ways with George Samenuk, who retired as its chairman and CEO after nearly six years on the job. McAfee also fired its president, Kevin Weiss. Today's purge wasn't the first at McAfee, which fired its general counsel in May after determining he had been involved in stock-option improprieties.
CNet, which runs a stable of technology news and entertainment Web sites, accepted the resignation of co-founder Shelby Bonnie, who has been running the company for the past six years.
McAfee named board member Dale Fuller as its interim CEO and president, and tabbed Charles Robel as its non-executive chairman.
CNet promoted Neil Ashe, a company executive since 2002, as its new CEO and appointed Jarl Mohn as non-executive chairman.
Both Samenuk and Bonnie expressed regret for the improper accounting of stock options that occurred during their tenures.
The mishandling of the past stock options awarded to employees will force both McAfee and CNet to wipe out some of their previously reported profits and may result in fines or other penalties if regulators and prosecutors determine that the misleading practices broke laws.
McAfee and CNet are among 130 companies nationwide whose stock-options practices are under government investigation or internal review.
Most of the inquiries are focused on a technique known as "backdating," which occurs when insiders look back in time for a low point in their company's stock price so the exercise, or "strike," price of the options could be set at that ebb.
As more companies have owned up to their backdating problems, they also have been cleaning out their executive suites and boardrooms. Most of the fallout has been centered in Silicon Valley, where stock options first became staple of compensation packages during the 1990s.
Mercury Interactive, a software maker being acquired by Hewlett-Packard, fired several executives, including its CEO, last year for their involvement in backdating.
Just last week, Apple Computer's former chief financial officer, Fred Anderson, resigned from the board of directors after the Macintosh and iPod maker acknowledged it had "serious concerns" about how some of its past stock options were handled.
Perhaps the most famous executive caught up in the options scandal is Jacob "Kobi" Alexander, the fugitive former CEO of software company Comverse Technology. He's in the southern African nation of Namibia, awaiting extradition to the United States to face charges of manipulating options.
Another former Silicon Valley CEO, Gregory Reyes of Brocade Communications Systems, is fighting criminal charges tied to his alleged mishandling of stock options at that San Jose-based company.
Copyright © 2006 The Seattle Times Company