Thursday, 12 October 2006

McAfee Executive Ranks Getting Purged

McAfee has fired its president Kevin Weiss and said its chief executive George Samenuk would retire after an internal probe into the software maker's stock option practices, but shares rose more than three percent on hopes that the investigation was nearing an end. Former Borland CEO Dale Fuller is the new interim CEO of McAfee.

Last August, McAfee revealed that an internal review of its accounting practices ordered after the SEC launched its investigation showed the company may have to restate its earnings dating back to 2003. Today, the company admitted the correction will be far worse as the company may have to restate earnings for the past ten years, to account for what it now estimates as up to USD 150 million in unaccounted options grants, presumably as executive compensation.

And although investors may appreciate having some resolution in a scandal that has hung over the company since an internal investigation uncovered the options issues in July, it's hardly a good time for McAfee to be leaderless, even if the company is interested in selling to the highest bidder.