DALLAS BASED ACS's HEADS CONTINUE TO ROLL
Affiliated Computer Services (ACS) is one of the largest companies still headquartered within the actual city limits of Dallas. Today, its CEO Mark King and its CFO Warren Edwards resigned during an ongoing investigation by the SEC over backdating options. Former CEO Jeff Rich quit in September over the same issue. To date over 60 of ACS top brass have gone packing. However, company founder and board chairman Darwin Deason has not been named in any investigations to date.
Posted on Monday, November 27, 2006
Pass The Trash: ACS Dumps CEO And CFO After Stock Option Investigation
Y'all are familiar with Affiliated Computer Services by now, right? That's the company that used to employ Family & Social Services Administration Secretary Mitch Roob and currently is part of the only group bidding for a $1 billion contract to privatize Medicaid and other social services in Indiana.
TDW has asked this before, and she'll ask it again now: Are we super-duper-certain that these are the guys we want funneling tons of cash out of our state in exchange for who-knows-what kind of service? From a press release issued today (hat tip for the heads up):
"DALLAS, Nov. 27 /PRNewswire-FirstCall/ -- Affiliated Computer Services, Inc. (NYSE: ACS), a premier provider of business process outsourcing and information technology solutions, today announced the completion of the Company's internal investigation into its historical stock option practices and the actions it is taking in response to the findings of the investigation, including changes in its executive management.
"The investigation concluded that certain conduct of Mark A. King, the Company's Chief Executive Officer, and Warren D. Edwards, the Company's Chief Financial Officer, violated the Company's Code of Ethics for Senior Financial Officers. Mr. King and Mr. Edwards have resigned, effective November 26, 2006, and have entered into separation agreements with the Company.
"The Board of Directors has appointed Lynn Blodgett [see part one on Tom Blodgett, his brother], who has been serving as Executive Vice President and Chief Operating Officer of the Company and as a director since September 2005, as President and Chief Executive Officer, and John Rexford, who has been serving as Executive Vice President - Corporate Development since March 2001, as Executive Vice President and Chief Financial Officer and as a director, in each case effective immediately. Mr. Blodgett and Mr. Rexford have served in various executive capacities with the Company for over ten years.
"Darwin Deason, Chairman of the Board, commented, 'The Board of Directors and I have the highest degree of confidence in the leadership capabilities of Lynn Blodgett and John Rexford. Their long-term executive management experience with ACS will allow them to quickly assume their new responsibilities and ensure continued service excellence for our client base, strong leadership for our employees, and long-term growth in value for our shareholders. This is a strong reflection on the depth and breadth of the ACS management team.'
"The Company is continuing to review and evaluate the results of the internal investigation and recent accounting guidelines established by the Securities and Exchange Commission to determine the accounting consequences of the use of incorrect measurement dates during the period from 1994 through 2005. The Company currently expects that the incremental cumulative non-cash compensation expense related to incorrect accounting measurement dates will be approximately $51 million, plus additional tax related expenses. This estimate may increase or decrease when finalized. The Company has not yet determined the impact of these accounting adjustments on its historical and current period consolidated financial statements or on its assessment of effectiveness of internal control over financial reporting, nor whether it will be required to restate its consolidated financial statements as a result of these adjustments.