The Home Depot Reviews Stock Option Grant Procedures

June 18, 2006  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on June 2006 A recent review of The Home Depot’s stock option grant procedures by the company revealed that all stock options granted since December 2000 had an exercise price based on the market price of the company’s stock on a specified grant date on or after the approval date.

The review spanned back 10 years to 1996.

The company said that it did not find any instances where stock options were retroactively priced. During the period, stock options were awarded in a regular process under which grants are authorized at the time of scheduled meetings of the board of directors of a board committee.

In five instances prior to December 2000, the date of the meeting or resolution approving the grant was later than the date used to determine the stock option exercise price. In three of those five instances, the market price of The Home Depot stock on the award date was higher than that on the date the exercise price was determined. Based on its review, the company has concluded there is no material impact to its previously filed financial statements associated with these grants. The Home Depot estimates that the unrecorded expense over the affected period was not more than $10 million in the aggregate. As a result, the company does not intend to restate prior period financial statements.