Monster Worldwide’s former chairman and chief executive, Andrew McKelvey, has resigned from the board after declining to be interviewed by a board committee reviewing stock option grants, according to a filing with the Securities and Exchange Commission.?
Earlier this month, McKelvey resigned as chief executive officer and chairman due to a belief that he could “no longer dedicate the number of hours required” for the company’s review of its stock options grants.
However, he remained on the company’s board of directors and was elected chairman emeritus.
On October 29, McKelvey tendered his resignation for both positions, effective immediately.
McKelvey and his legal counsel had a previously scheduled meeting with the special committee of the board reviewing stock options on October 30. However, the committee was informed on Sunday that McKelvey had declined to be interviewed and would not provide assurance that he would appear at a later date.?
In a letter detailing McKelvey’s rationale, his lawyer claimed that McKelvey “misunderstood” questions related to options backdating that were asked by the company’s independent counsel at a July meeting.
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McKelvey’s attorney, Steven F. Reich, wrote that McKelvey “focused too narrowly on the issue of whether he knew at the time that improper conduct had occurred, and not on the more general issue of whether backdating had occurred. During the time period relevant to [the questions], he did not understand that it was improper for the exercise price of stock options to be different than the price on the grant dates, nor did he understand that there were legal or accounting implications associated with that difference.”
The High Cost of Backdating ?
Monster is among more than 140 companies facing probes by federal investigators into possibly fraudulent options practices known as backdating.
A new analysis from market research firm Glass Lewis & Co has found that the stock scandal could implicate hundreds more companies, and has cost nearly 60 companies so far approximately $5.2 billion.