Stock It To Ya!
In all those stories written yesterday and today about the, ahem, resignations of Affiliated Computer Services CEO Mark King and CFO Warren Edwards in the wake of the back-dating stock option scandal, one thing's been overlooked: How much King and Edwards are getting to stick around till June 30, 2007, when they'll finally be escorted out of the building. (King and Edwards might have "violated the Company's Code of Ethics for Senior Financial Officers," but that's no reason not to let them have a Merry Christmas...and Happy New Year...and Happy Valentine's Day...and a lovely Memorial Day, right? Right.)
In letters filed yesterday with the Securities and Exchange Commission--one of two federal agencies investigating ACS, as we've mentioned so very, very often--ACS notes that the CEO and CFO will still make a small fortune from the company in order to oversee "the Transition Period." King will still make $52,500 per month as a base salary through June. He'll still get all the other employee benefits, as well. His real punishment is this: ACS will increase the amount of his stock options to the amount they would have been worth had he not gotten them at an earlier, lower price. He'll lose about $3.2 million, according to the release.
Edwards will lose about $1 million on his stock, but he'll still get $34,300 per month during the transition. So that should soften the blow just a little.
Just keep in mind one thing The Wall Street Journal said about this internal investigation in August: Don't trust it.
And one more thing regarding ACS: Today The Dallas Morning News pretty much had no choice but to cover the backdating stock-option scandal. For months, the paper has more or less ignored the whole mess, which The Wall Street Journal uncovered in a March 18, 2006, story headlined "The Perfect Payday: Some CEOs Reap Millions by Landing Stock Options When They Are Most Valuable; Luck--or Something Else?" There have been a number of subsequent stories detailing how ACS top execs received stock options dated just before those stocks experienced a sharp increase in value. One lawsuit filed here, on behalf of the Alaska Electrical Fund, alleges that ACS' "entire Board of Directors and certain top officers" are guilty of "violations of federal and state law, including breaches of fiduciary duty, abuse of control, constructive fraud, corporate waste, unjust enrichment and gross mismanagement which have caused damage to ACS."
But till today, Dallas' Only Daily surrendered the story to the Journal. The News didn't even mention the scandal in September, when the city council OK'd a deal to give Affiliated Computer Services $13.29 million bucks over five years for some red-light cameras--ignoring the recommendations made by the council's public safety committee. It didn't even get a mention in the November 10 story about how council wants to get 60 of ACS' cameras up and running by April.
See, nobody's in much of a hurry when it comes to this story: not King and Edwards, who get to stay through summer, and not Dallas' Only Daily, which only has a Web site that seems to take eight months to load. --Robert Wilonsky