Biomet's Option Puzzle

Against all odds, Biomet (BMET Quote) has joined the list of companies coming under the microscope for possible stock-option abuses.

Unlike some other major healthcare players like Caremark (CMX Quote) and UnitedHealth Group (UNH Quote), which have already attracted government scrutiny for their lucrative equity-based awards, Biomet has regularly won applause for its frugal treatment of top company leaders. Indeed, Biomet has long maintained a policy that prevents the company from giving any stock options to its chairman or CEO at all.

Nevertheless, Biomet and rival Stryker (SYK Quote) recently wound up on a short list of medical-device companies that could soon face the stock-option music. A recent Deutsche Bank statistical analysis ranks big companies for the apparent likelihood that they timed option grants to make them more profitable for holders. Stryker ranks 48th out of roughly 500 companies studied and Biomet 67th. ...