CNet CEO Quits Following Options Probe
Wednesday, October 11, 2006; 1:24 PM
SAN FRANCISCO -- Shelby Bonnie, chairman and chief executive of technology news publisher CNet Networks Inc., has resigned following a review of the company's stock-options practices, the company said Wednesday.
The company named Neil Ashe as its new chief executive, effective immediately.
CNet said a special committee established to investigate the company's past granting of stock options found instances of backdating, a practice that can inflate the potential windfall to recipients when options are exercised. The company said a number of executives, including Bonnie, "bear varying degrees of responsibility" for deficiencies in CNet's past options-granting process.
Bonnie, a co-founder of the San Francisco-based company, will remain a member of CNet's board. He apologized for the options-related problems in a statement released by the company.
Ashe joined CNet Networks in 2002 and was most recently senior vide president of strategy and development.
Jarl Mohn has been named non-executive chairman. He was previously president and chief executive of Liberty Digital Inc.
CNet shares fell 80 cents, or 8 percent, to $9.10 in morning trading on the Nasdaq Stock Market. The company also said it would delay filing financial reports and cut its guidance.
It is one of many companies to run into problems by backdating options to days when the company's stock price was lower, thus boosting executive payouts. At least 130 companies have disclosed SEC, Department of Justice or internal investigations into options practices, according to a review by The Associated Press.
Other top executives also have been ousted or left their positions as a result of the probes. Also Wednesday, anti-virus and security software provider McAfee Inc. fired President Kevin Weiss, and announced that CEO and Chairman George Samenuk will retire after a stock options investigation found accounting problems that will require financial restatements.
Mountain View, Calif.-based software maker Mercury Interactive Corp., one of the first companies to disclose problems with backdated options, last year dumped CEO Amnon Landan, as well as its chief financial officer and general counsel.
Perhaps the most famous executive caught up in the options scandal is Jacob "Kobi" Alexander, the fugitive former CEO of software company Comverse Technology Inc. He's in the southern African nation of Namibia, awaiting extradition to the United States to face charges of manipulating options.