Investors Seek 'Restatement' of Bonuses

But the issue is broader than the restatements at just Computer Associates or Nortel, and includes current efforts to have former New York Stock Exchange Chairman Richard Grasso surrender some of his $139.5 million pay package.

"The exposure of extreme abuses during the past couple years has gotten people extremely focused on rules and their enforcement," said Gary Lutin, an investment banker and shareholder rights advocate. "What they really have to focus on is the basics of fairness and integrity. That's what we're really getting to."

Requiring executives to repay those bonuses -- regardless of whether they directly or indirectly were involved in specious accounting -- is one of those simple issues of right and wrong, Lutin argued.

"If someone is overpaid, it should get adjusted," he said. "It's just basic fairness in business. You don't keep miscalculated payments. You don't ask if was it fraudulent or not."

That view, if widely adopted by investors, could have far-ranging implications. Public companies have restated hundreds of financial reports over the last several years. Last year alone, companies restated 206 annual reports, according to Huron Consulting Group, up from 183 in 2002.

And the pace of restatements shows no signs of abating. HealthSouth, which now trades on the pink sheets, announced earlier this year that it had detected up to $4.6 billion worth of improper accounting in its financial statements. On Friday, four executives, including former CFO Michael Martin, admitted to charges such as conspiracy to commit wire fraud and falsifying financial records, and have agreed to help prosecutors build a case against former CEO Richard Scrushy who is accused of orchestrating the fraud that dates back to at least 1996.

More than a dozen former HealthSouth executives have pleaded or agreed to plead guilty to fraud charges. Scrushy, who collected $24.5 million in bonuses and another $1.29 million worth of restricted stock from 1996 to 2001, has denied any wrongdoing; his trial is slated to begin in August.