Research Guru / Moderator
Posted:
Apr 28, 2008, 11:53 PM
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Former Pixar CFO faces stock option abuse charges
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The U.S. Securities and Exchange Commission plans to recommend a civil proceeding against former Pixar Animation Studios chief financial officer Ann Mather, Google Inc. said Monday.
Google said the SEC told Mather last week that its Los Angeles staff will recommend alleging securities law violations in connection with stock option transactions at Pixar, where she was CFO from 1999 to 2004.
Mather is currently a Google board member, but the company said that the case does not involve her current responsibilities.
She's accused of "backdating," a practice in which the value of a stock option grant is set retroactively to benefit the recipient. Without proper disclosure, backdating options can cause an underpayment of taxes and exaggerate corporate profits.
While chief financial officer at Pixar, the company reported about $520 million in profits and released one blockbuster after another: Toy Story 2, Monsters Inc., Finding Nemo and The Incredibles. Currently chair of Google's audit committee, she's been on the Internet search provider's board since November 2005.
"Ms. Mather acted diligently and responsibly at all times in her position as CFO at Pixar," Mather's lawyer, Timothy Coleman of Dewey & LeBoeuf, said in a statement. "There is no basis for any legal action against her."
SEC spokeswoman Michele Wein Layne declined comment on the case.
Mather is the third executive to face stock options backdating allegations at companies operated by Apple Inc. co-founder Steve Jobs. Jobs has been cleared of wrongdoing by audit committees at both Pixar and the Walt Disney Company, which took over Pixar in a 2006 agreement that put him on Disney's board of directors. When that agreement took place, Mather no longer worked for Pixar.
Last year, a Disney audit committee found no deliberate misconduct by current associates with the company, although it found that backdating had taken place at Pixar before the acquisition.
A Disney spokeswoman said Monday that the company had no information that would alter that conclusion "or that would lead the company to believe that the SEC staff will recommend an enforcement action as to any individual currently associated with the Walt Disney Company."
Disney paid about $30 million to the Internal Revenue Service and the State of California for income tax liabilities assessed on Pixar employees holding the options.
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"Oh boy." -- Allan Sherman
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