Stock option probe triggers departure of Mercury CEO


Stock option probe triggers departure of Mercury CEO

Antony Savvas

Mercury Interactive’s CEO and two other top executives have resigned after a stock option probe by the US Securities and Exchange Commission (SEC).

Mercury Interactive is an IT governance and applications-testing software maker wiht global sales of almost $700m (£412m). High-profile UK customers include the National Lottery, travel company Opodo, Egg, Marks & Spencer, Accenture and Abbey bank.

The company's CEO Amnon Landan resigned this week after the publication of an SEC investigation into Mercury Interactive's accounting procedures.

A special committee set up by the company had found that, over the past decade, Mercury Interactive incorrectly reported the date of at least 49 stock-option grants. The dates picked were when the stock price was lower than when the stock options were actually granted.

Along with Landan, chief financial officer Douglas Smith and general counsel Susan Skaer have resigned.

Mercury Interactive said it would restate its accounts going back several years, but the Nasdaq-listed company admitted it would struggle to meet a Nasdaq deadline of 30 November to do so. The company risks being delisted if it fails to meet the deadline.

As news of the resignations spread, Mercury Interactive's share price dived 32%, with speculation on Wall Street that the firm could be a potential takeover target by rivals in the same IT governance space.

Mercury Interactive has appointed its president and chief operating officer Tony Zingale as its new CEO.

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