Irvine-based Broadcom Corp. said Friday it’s likely to restate more than five years of earnings and take a charge of more than $750 million to account for the timing of stock options.
Some option grants awarded from 2000 to 2002 were improperly backdated, the chipmaker’s audit committee said in a preliminary finding.
That could affect financial statements for 2000 through 2005 and the first quarter of 2006, Broadcom said.
The company didn’t identify who got the options in question but said company founders Henry Samueli and Henry Nicholas aren’t among them. Neither are former chief executive Alan “Lanny” Ross or current boss Scott McGregor, Broadcom said.
Some of the granted options were never excersized because Broadcom’s shares fell below the grant price during the tech downturn, the company said.
The announcement helped clarify for investors the extent to which the backdating controversy has affected Broadcom. Investors appeared to shake off the news.
Broadcom’s shares were flat near the end of trading.
The stock is off more than 35% in the past three months, partly on concerns over backdating that first came to light in May when reports surfaced that some stock options at the company were well-timed to market prices.
“We are making good progress in our equity award review and toward the eventual resolution of this issue,” McGregor said. “The number of stock options awarded plus the volatility and high valuation of our stock several years ago caused the sizable additional non-cash expense estimate that we announced today.”
The restatement won’t affect the company’s cash position or financial condition or previously reported revenue, Broadcom said.
The company said its options probe is ongoing. Broadcom said it could delay filing its latest quarterly report because of the issue.
In June, the Securities and Exchange Commission asked Broadcom for documents relating to the chipmaker’s granting of options.
