TechWeek: Mercury's Option Microcosm

Shocking as it is, the scandal shaking Mercury Interactive (MERQE Quote) is merely the latest example of the abuse of stock options by corporate management.

"Don't be surprised at this," comments Lynn Turner, research director of proxy advisory service Glass Lewis and former chief accountant at the Securities and Exchange Commission. "There's no question that what was [allegedly] going on at Mercury was going on at other companies."

What Mercury allegedly did was backdate option grants to executives, including CEO Amnon Landon, CFO Douglas Smith and General Counsel Susan Skaer, allowing them to buy at a more favorable, that is cheaper, strike price. All "were aware of and, to varying degrees, participated in the practices," the company's board said. The three executives resigned Wednesday. ...