In the Big Rock Candy Mountains, you never change your socks
And little streams of alcohol come a-trickling down the rocks.
The brakemen have to tip their hats and the railroad bulls are blind.
There's a lake of stew and of whiskey too,
You can paddle all around 'em in a big canoe,
In the Big Rock Candy Mountains!
-- From "Big Rock Candy Mountain," by Harry McClintock
There's trouble a-brewing in Big Rock Candy Mountain View. Google (Nasdaq: GOOG ) director Ann Mather could face a lawsuit over backdated stock-option grants she approved in her time as CFO of Pixar.
The SEC has "advised" Mather that there's a civil action coming over yonder mountain, sure as the day is bright. The problem involves option grants to Pixar staffers like Toy Story director John Lasseter, who got a million Pixar options at a favorable, three-month-old price in 2001. All of this happened way before Ms. Mather joined the Google board, while Pixar was an independent and publicly traded company under chairman and majority shareholder Steve Jobs, of Apple (Nasdaq: AAPL ) fame and fortune.
Apple, of course, has had its own run-ins with the SEC over option grants. The boards and internal investigation teams at both Pixar owner Disney (NYSE: DIS ) and Apple have concluded that we shouldn't blame The Turtlenecked One for these option-related problems -- which shifts the burden to the CFOs and legal teams at the time. Hello, Ms. Mather.
With Google's shareholder meeting less than two weeks away, we'll soon see whether this issue is coming 'round to bite Mather. She's up for re-election to the Google board at the annual meeting. You have to assume that her fellow board members will support the chairwoman of their own audit committee, so 70% of the needed votes are already on her side. Thanks, Larry and Sergei -- those 10-vote Class B shares do come in handy.
Under these circumstances, an 85% approval rate would amount to 50% of independent shareholders giving her the thumbs-down. Now we'll see how much stock Google owners put in SEC investigations and past lives. Not a whole lot, I'll bet. After all, the Pixar story is nearly two years old, and Ann is still the audit chair. Her problems are not necessarily Google's.
Now, where's that lake of stew, again?
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