News 

The potential charge was revealed in a filing to the US financial regulator, the Securities and Exchange Commission. The movie studio said that the payment would cover the additional taxes that Pixar employees will incur when their backdated options are exchanged for new options valued at the stock price on the day they were issued.

Backdating involves falsely setting an earlier issuing date for options, rather than the date on which they were

ADVERTISEMENT

actually granted, in order to take advantage of a lower share price. Although not strictly illegal, backdating does have to be declared in financial reports and the cost included both as an expense for the company and as income for the employees receiving the options. Pixar failed to do either.

The revelation that Pixar had issued the options came at a bad time for its former chairman and CEO Steve Jobs, who was already in the spotlight after Apple revealed that it too had issued backdated options. Jobs, then and now the Apple CEO, was subsequently exonerated by both Disney and Apple. However both cases are being investigated by the SEC who may well take a less forgiving approach than the companies' own internal investigations.

Jobs, who owned more than half of Pixar's stock, is now the single largest Disney shareholder.