Video-game maker THQ announced that an independent investigation of its historical stock-option grant practices found no evidence of fraud or misconduct.
Nevertheless, the company it will record an additional $11 million in non-cash stock-based compensation expense for the period from January 1, 1996, through March 31, 2006. The adjustments for fiscal year 2007 were immaterial and will be reflected in the company’s quarterly report for the period ended September 30, 2006.
THQ explained that a special committee created to investigate the company’s options practices identified instances where documentation of certain grants was lacking. The committee also determined that the company misapplied generally accepted accounting principles by using incorrect measurement dates for financial accounting and reporting purposes on a number of occasions.
Most of the additional expense related to these incorrect dates, noted the company, pertained to grants made to non-executive employees.
THQ also stated that the special committee recommended certain corrective measures to improve procedures for granting and administering stock options, which the board of directors adopted and the company is implementing.