A local company is now under a watchful eye after a top executive resigned following questionable stock options. It's a scandal that experts say could put the integrity of the O.I. Corporation at risk.
"In general, it's much easier for firms to lose their reputation, and it's much harder and takes much longer for them to regain it," Assistant Professor of Management at the Mays Business School at Texas A&M University, Joseph Coombs said.
The O.I. Corporation may face a long road ahead after the resignation of its president and CEO, William Botts. The company says an internal investigation turned up misrepresentations of stock options with questionable dating.
Coombs says the company needs to act quickly to restore their reputation.
"They've taken the first step. The CEO has voluntarily resigned from the company," said Coombs. "The new leadership coming into the company is important, and specifically for that leadership to take actions to ensure this doesn't happen again."
O.I. has decided to correct previous financial statements by restating its earnings. The estimated cost of the investigation is $1.25 million dollars, and as unique as this case may sound, officials say it's actually a fairly common occurrence.
"This is not unusual; from the period of 1996-2005, almost 30% of companies have been found to have restated options," Coombs said.
O.I. Vice President and Chief Financial Officer Bruce Lancaster says, the company is still strong financially and says he doesn't think the situation will be a major obstacle to overcome.
Currently, O.I. stocks haven't seen a significant impact from the recent events, other than a brief delay in trading last week when the news first broke. The company's stock price closed at $11.55 Thursday on the NASDAQ.
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