Juniper Networks Inc. said Wednesday that it would record nearly $900 million in expenses to reflect backdated stock option grants that were given to Chief Executive Scott Kriens and others.
The charge relates mainly to options granted from June 1999 to December 2003, the company said.
Kriens received two grants that were canceled in 2001 without being exercised, Juniper said. The board said it supported Kriens, assuaging some concerns that he may lose his job over the scandal. The company said it found numerous instances in which the grant dates were chosen with benefit of hindsight, posing "serious concerns" about former management.
"We should have had better stock option granting processes, controls and oversight in place, and we did not," Kriens said in the statement. Kriens hasn't exercised any options since 1998, a year before the company's initial public offering, Juniper said.
Sunnyvale, Calif.-based Juniper, second to Cisco Systems in sales of Internet routers, is among more than 190 companies that have disclosed investigations into the backdating of option grants to inflate returns to recipients. The probes have prompted at least $8 billion in restatements, revisions and charges to reflect costs that should have been recorded.
"I would not call [it] chump change," analyst Sam Wilson at JMP Securities said of Juniper's $900-million restatement. He rates the shares "strong buy" and doesn't own them. He said the total wasn't surprising, given that the shares traded for more than $200 during the Internet bubble.
Juniper's restatement ranks among the three biggest resulting from options probes. UnitedHealth Group Inc. said Tuesday that income might be reduced by as much as $1.7 billion to correct improper accounting. Chip maker Broadcom Corp. is restating results to add $1.5 billion in costs.
Juniper shares dropped 5 cents to $19.20. The company said it planned to file financial reports for the quarters ended June 30 and Sept. 30 in the first quarter of next year.