This thing really is a monster! I'm referring to the growing list of companies that backdated the granting of stock options to executives so as to increase the returns from those options. More than 80 companies have had to restate earnings following involvement in such contretemps, and the number is growing steadily.

The latest company to line up among the ranks of stock-option tinkerers and earnings restaters is a monster indeed -- Monster Worldwide (NASDAQ:MNST), the owner of one of the most widely recognized online job-listing services. The company said it overstated its earnings over a nine-year period by a total of $271.9 million after taxes because the stock-option grants were improperly recorded. In addition, Monster apparently made more than $500,000 in inappropriate payments to the company's founder, Andrew McKelvey.

Adjustments Monster made subsequent to the option shenanigans included net income reductions of $9.2 million for 2005, $14.4 million for 2004, and $27 million for 2003. At the same time, the company admitted to making payments to McKelvey that went to fund insurance for relatives and his personal employees. In particular, investigators found that Monster paid for the health-care costs of nine of McKelvey's relatives and that another nine individuals that McKelvey personally employed at varying times since 1997 were granted stock options.

According to Monster, McKelvey has paid back $533,000 of the expenses, and the company is continuing to seek reimbursement for its other related costs.

To this point, nearly 200 companies have been the subject of internal or federal investigations into whether backdating has inflated the value of the stock options granted to their executives. Grants that might have been set at an earlier date when the company's share price was materially lower would carry more value than those granted at subsequent dates when the shares might have been trading higher. The ultimate value of the shares to the executives is simply the difference between the company's stock price on the grant date and the price on the day when the resulting shares are sold.

Among the companies that have undergone scrutiny for problems associated with backdating their options are Brocade Communications Systems (NASDAQ:BRCD), Apple Computer (NASDAQ:AAPL), and Broadcom (NASDAQ:BRCM). Earlier this month, it was disclosed that date irregularities were common in the options granted to executives of Home Depot (NYSE:HD) from 1980 to 2000.

So where will this stock-option dishonesty lead us? It's probably an unfortunate commentary on the world we live in that most of the companies besmirched by stock-option dating irregularities have seen their share prices remain generally unaffected. But for my money, there's something smarmy about the practice -- to say nothing of its being illegal in most cases -- and I'd generally warn Fools away from investments in the miscreants.

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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your comments and questions. The Fool has a disclosure policy.