Office Depot CEO Steve Odland’s wrist has got to be aching about now.
The Securities and Exchange Commission fined Odland $50,000 for devising a plan three years ago to leak to his friends on Wall Street the observation that Office Depot just might not make its quarterly earnings targets.
In doing so, Odland and the executive who carried out the plan, then finance chief Patricia McKay, violated regulation FD, which prohibits companies from playing favorites with one group of investors over another.
McKay was also fined $50,000. Neither she nor Odland admitted or denied the findings. Office Depot, which has been under scrutiny for some time, agreed to pay $1 million to settle this and a related accounting case.
“Office Depot executives selectively shared information with analysts and the company’s largest shareholders in order to manage earnings expectations,” said Robert Khuzami, director of the SEC’s Division of Enforcement. “This gave an unfair advantage to favored investors at the expense of other investors and, as today’s action shows, is illegal.”
Those are strong words and ones Odland surely won’t soon forget. Lucky for him he appears to have the resources to pay the fine without too much trouble – which is only fair, after all he’s done for shareholders.
He received $27.5 million in compensation between 2007 and 2009, the company’s securities filings show. Since May of 2007, when the alleged misconduct took place, the value of Office Depot shares has declined by $8 billion. So much for taking care of business.