Walt Disney Co. said Monday that the backdating of stock options at Pixar Animation Studios was broader than previous reports suggested, the Los Angeles Times reports.
News accounts had focused on a handful of top executives whose options were worth as much as a few million dollars when they were awarded. But in a securities filing, Disney said inflated and unexercised options held by the rank and file at Pixar were worth about $323 million under the Black-Scholes-Merton method for valuing options.
"That's a big number," said Charles Elson, director of the University of Delaware's Weinberg Center for Corporate Governance.
Disney's estimate came in an offer to replace the tainted options with those reflecting the price of Pixar's shares when the options were issued. Disney will make up the difference with cash but will withhold taxes on that sum.
Pixar had falsely claimed that the options were issued on earlier dates when the company's stock was trading at lower levels, Disney has said. That meant that they were already quite valuable and should have been counted as an expense for Pixar and as income for the employees.
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