Institutional investors are turning up the heat on companies to determine whether their past compensation practices skidded into the murky waters of backdating stock options, even as regulators vow their own scrutiny and still more executives find themselves either under investigation or on the unemployment line.
Earlier this month, CalPERS, the largest U.S. public pension fund with more than $200 billion in total assets, sent a letter to 25 companies under investigation by the Securities and Exchange Commission. The letter listed seven recommendations for directors, including that they conduct independent investigations into backdating allegations, publicly disclose all findings from both internal and external probes, and develop and disclose in their financial and proxy statements a new board policy for the determination of all option grant dates (see box at right for the letter).
