Business
Pediatrix reports stock backdating
NEWS IN BRIEF — Posted Dec. 25, 2006
Pediatrix Medical Group is among the latest to say it was involved in backdating executives' stock options.
The Sunrise, Fla.-based physician practice management company said in a prepared statement that its audit committee found "there were deficiencies in the process by which options were granted at the Company, including instances of backdating of option grants as well as inadequate procedures which resulted in or permitted the misdating of option grants." The company expects that it will have to restate past compensation, awarded between 1995 and 2006, by $28 million.
In backdating, options are awarded on a certain date but given an effective date of whenever the company's stock had been trading at its lowest point over the previous 52 weeks.
UnitedHealth Group is among many companies in turmoil over backdating. The practice is not necessarily illegal, though companies have come under criticism for giving executives inflated rewards.
Pediatrix is continuing its investigation into backdating, and says it might revise the $28 million figure as it learns more. The company said it also contacted the Securities and Exchange Commission about the backdating, and that Pediatrix is cooperating with an "informal investigation" by the agency.
Pediatrix and its affiliated professional corporations represent 890 physicians, mostly pediatric subspecialists, in 32 states.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/12/25/bibf1225.htm.
