Two government agencies are reviewing TeleTech Holdings Inc.’s accounting for stock-option grants over a 12-year period, the Douglas County company said in a filing Wednesday.
The call-center operator restated downward its 1996-2007 earnings by $65 million, including a cumulative pretax charge of $59.7 million for “mistakes” it made in accounting for stock-option grants.
The Securities and Exchange Commission and the Internal Revenue Service are reviewing the findings of TeleTech’s internal investigation into the matter, the company said in its 2007 annual report.
TeleTech said the audit committee of its board of directors initiated a voluntary, independent review of its stock-option accounting in September.
The review came as the SEC was cracking down on companies for recording stock-option grants to executives, in hindsight, on dates the stocks were trading at lower prices. The practice, known as backdating, reduced the expense companies recorded for their executive compensation.
“There was no regular or systematic practice of using hindsight to select grant dates and no pattern of consistently hitting ‘lows,’ ” TeleTech said of the committee’s findings.
But, the company continued, “there was some evidence that certain employees/officers involved in selecting grant dates, none of which are actively employed by us, had some understanding of the accounting implications of selecting dates with hindsight. However, there was no conclusive evidence demonstrating that those involved in selecting dates knowingly and/or purposely violated accounting or disclosure rules.”
TeleTech’s shares tumbled 26 percent Thursday after the company announced the restatement and predicted slower growth in revenue and operating margin for 2008.
Greg Griffin: 303-954-1241 or ggriffin@denverpost.com
