Irvine chipmaker Broadcom Corp. came out Tuesday with revised financial statements for 1998 to 2005 with charges of $2.2 billion for stock option grants that weren’t properly accounted for.
The company also said none of the misdated options were granted to founders Henry Samueli and Henry Nicholas, current Chief Executive Scott A. McGregor or his predecessor Alan E. Ross.
The company cited Nicholas and other former executives for a lack of controls and inappropriate grant practices. Nicholas was involved in the mistiming of some grants but didn’t personally benefit from any of them.
No current directors received misdated options, the company said.
The news caps a look running internal probe into the timing of Broadcom option grants, which also are the subject of a formal Securities and Exchange Commission investigation.
Broadcom’s options ordeal is by far the most costly in Orange County and the largest nationally.
It resulted in the departure last year of longtime financial chief Bill Ruehle and prompted speculation about the roles of cofounders Samueli, the company’s chairman and chief technical officer, and Nicholas, its former chief executive.
Late last year, Broadcom canceled $33 million in options granted to Ruehle.
The report also cited Nancy Tullos, former vice president of human resources, for involvement in the grants. She left Broadcom in 2003.
“The review process was extremely thorough, as we said it would be,” McGregor said. “We look forward to putting this matter behind us,” he said. “None of the employees found to have been actively responsible for the historical problems resulting in the restatement are still with the company. In addition, in mid-2003 we significantly strengthened our equity award practices and put into place rigorous processes to prevent and detect any future instances of improper accounting for equity awards.”
Nearly all of the 233 million revised grants were awarded to employees other than executives, Broadcom said.
The chipmaker also said it filed its delayed 2005 and 2006 quarterly reports, which were hung up pending the options probe.
Broadcom’s option granting since 2003 has been sound, the company’s audit committee found.
The company said it now believes it’s in compliance with Nasdaq rules but is awaiting confirmation from exchange officials.
