BUSINESSPediatrix to review stock option grantsThe practice-management company is among the growing ranks of firms whose executive compensation practices are being scrutinized.By Katherine Vogt, amednews staff. Aug. 28, 2006. Pediatrix Medical Group Inc. says it has launched an internal investigation into its stock option practices. The Sunrise, Fla.-based physician practice-management company, which specializes in pediatric subspecialties and high-risk obstetrics, announced on Aug. 3 that it was launching a voluntary review of its stock option grants. Among those investigating are the company board's audit committee and the company's outside legal counsel. Few details were given about what prompted the review, or what specific practices were being targeted. The company said in a news release that the review was initiated after "a shareholder inquiry and in light of recent reports in the financial media regarding stock option practices." Scores of other companies have been publicly identified recently as targets of federal investigations into how they awarded stock options to their executives, though Pediatrix has not been named as a target. Many of the inquiries have focused on whether the companies illegally "backdated" stock option grants to make executives' stock more valuable. In backdating, a company awards an executive stock options, but finds a way to make the options effective as of the date when the company's stock hit its past 52-week low or some other date when the stock price is low. [...]Full text of American Medical News content is available to AMA members and paid subscribers.
Copyright 2006 American Medical Association. All rights reserved.
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