Power Integrations Inc. came out with two big announcements on Friday: the resignation of its CFO and chairman, and initial findings from an internal investigation that cited discrepancies between actual and recorded stock-option grant dates.
CFO John Cobb and chairman Howard Earhart resigned from the $144 million (in sales) supplier of integrated circuits, according to a company press release. The same release announced that a special committee had reached a preliminary conclusion that the actual dates of measurement for certain past stock-option grants differed from the recorded grant dates for the awards.
As a result of the possible discrepancies, the company may need to restate its financials from 1999 through 2004 and for the first three quarters of 2005. Officials warned that the charges may affect future periods and that the stock-based compensation charges would decrease income from operations, net income, and retained earnings.
The company does not expect the anticipated restatements to have a material impact on its historical revenues, cash position, or operating expenses not related to stock options. Further, Nasdaq will give Power Integrations more time to file its 2005 annual report before the exchange makes a decision regarding delisting the company’s securities, Power Integrations noted.
Separately, the Securities and Exchange Commission is reportedly investigating the timing of stock-option grants at several companies; the latest to announce that it’s under scrutiny is Jabil Circuit Inc. Jabil officials said recently that an internal investigation of its stock-option grant practices found no issues of backdating or improper actions.
Earlier, Comverse Technology said in a regulatory filing that it had received a subpoena from the U.S. Attorney’s Office for the Eastern District of New York in connection with the issuance of stock-option grants between 1995 and the present. The company added that it intends to fully cooperate with the inquiry. Comverse also said that representatives of its special committee have met, and are cooperating, with the staff of the SEC on issues relating to the company’s stock-option grants.