Monster’s CEO Resigns Amid Review of Options

Stock option investigations claimed another executive job Monday as Monster Worldwide Inc. Chief Executive Andrew McKelvey resigned, saying he couldn’t handle the time required for both the executive job and the company’s review of past option practices.

New York-based Monster, the parent of Monster.com, a website for job seekers, said in July that it might restate financial results for the year ended Dec. 31, 2005, and previous years to record additional noncash charges for stock-based compensation expenses relating to various option grants.

Last week the company said that because of the ongoing review of option grants, it would not be able to provide comparative quarterly results for the three- and nine-month periods ended Sept. 30, 2005, when it reports results this month.

On Monday, McKelvey, 71, who founded Monster in 1967, said he would give up the CEO post while remaining on the board. The company said he was elected chairman emeritus.

“At this stage in my life, I simply can no longer dedicate the number of hours required by Monster’s rapid global growth and the additional demands of time associated with the ongoing historical stock option grant review,” he said.

William Pastore, Monster’s president and chief operating officer, was named to succeed McKelvey as CEO and chairman.

The company’s stock, which fell sharply in June after it disclosed its investigation, edged up 50 cents to $40.48 on Monday. It is down 0.8% year to date.

James Janesky, an analyst at brokerage Ryan Beck & Co., said Pastore, 58, had been handling the company’s day-to-day operations for some time. Janesky said he expected a “seamless” transition for Pastore.

Monster last month suspended Myron Olesnyckyj, its general counsel, pending its review of option practices.

More than 140 companies this year have disclosed investigations into their option practices, including internal probes and those by the Securities and Exchange Commission and the Justice Department.

The investigations center largely on the practice of backdating of option grants to executives and other employees in the 1990s and the early part of this decade. Backdating can involve cherry-picking of option prices after the fact, to boost the potential value of the options.

The practice understated many companies’ expenses and overstated income, in some cases for years. If backdating was deliberate it could constitute securities fraud.

More than 20 executives and directors have either quit or been forced from their jobs because of option-practice investigations.