Saturday, May 13, 2006

A Significant Deficiency

That's what UnitedHealth calls an 'accounting' issue that will cause them to reduce reported income for the past three years or more by at least $286,000,000. What it really looks like is that the Wall Street Journal was right: UnitedHealth did backdate stock option grants.

Furthermore, the company hinted that it may have to forego tax deductions relative to options in the future. Since there are now $2.7 billion in unexercised options, this could have a real effect on future income.

Of the eight companies the Journal profiled in its March article re backdated options, three have had a change of management and three will have to restate income.

No comments: