Yet another big name CEO resigns due to inappropriate handling of stock options. The latest is Bruce Karatz of KB Homes. He follows the executives of Apple and UnitedHealth as admitting to not properly accounting for their stock options. Bruce made $155.9 million in 2005, mostly from exercising those backdated stock options he engineered.
Recall another signature program where "improved performance" merits "increased pay"? While much newer than stock options with their 12 year history, the President’s No Child Left Behind education initiative is built on the same foundation. With evidence that nearly 30% of publicly traded companies deployed shenanigans to optimize executive pay, why would schools be any different?
Unfortunately, KB Homes attended the same school of internal investigations as the Bush White House. Their analysis failed to reach a conclusion as to Mr. Karatz’ motivation and whether the wrongdoing qualified as intentional. Did they not have access to Bruce to ask him?
Or is this a dodge to keep another high dollar political donor out of jail for his crimes. In a rare display of early bi-partisanship will Mr. Karatz get a free pass given his past preference for Democrats? Watch the treatment of Bush pioneer Charles Wyly, William McGuire of UnitedHealth Group, and the Democratic Steve Jobs of Apple.