CA has joined the ranks of companies with stock options problems. Apparently, they established a pool of options without specifying the recipients of such options for, in some cases, two years. In the '90s CA stock was on an upward slope, so when the recipients received their options they had already made money on them. This practice will cost them anywhere from $40,000,000 to $120,000,000 in restated expenses.
At the same time CA announced that they had nor properly accounted for revenue related to subscription pricing for software over a couple of years. This minor error will increase 2005 revenue by $40,000,000, but decrease revenues over the next five years by the same amount.
The last time I looked at CA was last week relative to their payment of 'blackmail'. Executives have been convicted of fraud. They back-dated options. They have trouble keeping their books straight. What's next?
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