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Member, Beacon International Group, Ltd.
CHICAGO--Aon Corp. plans to restate its financial results for 2003, 2004, 2005 and for the first three quarters of 2006 after a review of its options granting practices revealed unrecognized compensation expenses, the brokerage said Thursday in a Securities and Exchange Commission filing.
The Chicago-based brokerage said last month that its audit committee had commenced a comprehensive review of its option grant date practices and that incorrect measurement dates for certain stock options granted in 2000 and in certain prior years appeared to have been used for "financial accounting" purposes.
The audit committee found no misconduct by current or former management or directors, Aon said in its filing.
The review, though, "did reveal a limited number of instances in which options were granted as of a prior date, for example, to honor employment or other previously made contractual commitments," Aon said. It said, however, that no evidence was found that the selection of grant dates "was motivated by pricing considerations."
The "cumulative impact of the delegated grants and other administrative errors" from 1994 to 2006 amounted to $66 million before tax, Aon said.
Aon has recorded an additional noncash stock-based compensation expenses and related tax affects with regard to past stock option grants, and it is restating that impact. These adjustments, after tax, were $2 million, $3 million, $9 million, and $10 million in fiscal years 2005, 2004, 2004 and 2002, respectively, Aon said.
Aon representatives was not immediately available for comment.