In a statement released yesterday by chairman John E. Pepper, Jr., the Walt Disney Company reported no "intentional or deliberate acts of misconduct" following an internal investigation into the backdating of stock options at Pixar prior to Disney's acquisition of the animation company last year.
Backdating enables companies to grant stock options to employees at a previously lower price, thus creating an immediately higher profit. The practice is not illegal, but has raised ethics questions. Pixar and Apple are among the higher profile companies that have come under fire from the SEC and the Department of Justice for backdating options.
Among the options in question are a million shares granted to John Lasseter in March 2001 as part of a contract agreement. The Pixar options were priced as of December 2000, when they were worth 20 percent less. Steven Jobs signed the employment contract with Lasseter.
Disney has agreed to absorb the tax liability associated with the backdating, but "expects that the impact associated with remedying these tax issues will not be material to the Disney financial statements."
Sources: The New York Times, MarketWatch