Nasdaq-listed technology company BEA Systems has demoted its general counsel following an investigation by Simpson Thacher & Bartlett into stock options backdating.
Bob Donohue will stay on at the company, but in the lesser role of vice-president of the legal department.
BEA has yet to find a successor, but the new general counsel will report directly to the chief executive officer and to the board’s governance committee, a new measure taken since the Simpson Thacher-led inquiry found that there were procedural errors in the way stock options were granted.
Backdating is when stock options are selected using an earlier date to benefit from a lower price.
The US Securities and Exchange Commission, which has found evidence of backdating at companies such as Apple, is also “informally investigating” BEA.
The demotion of Donohue and others and the repayment of stock options by BEA’s management are voluntary measures to boost investor confidence.
BEA’s legal panel is also in flux, with the company’s general counsel for Europe, the Middle East and Africa Nils Breidenstein ditching Bird & Bird as a member firm earlier this month (The Lawyer, 5 February). He is yet to find a replacement.