Stock Options

Bruce Karatz, who rode the housing boom to become one of the highest-paid executives in the country, was indicted by a federal grand jury Thursday on charges of manipulating stock options -- becoming one of the few executives to face criminal charges in the nation's options backdating scandal. Karatz, 63, served as chairman and chief executive of Westwood-based KB Home from 1986 to 2006, when he resigned under fire.

Bruce Karatz may be facing prison time, but he was the one doing the comforting before his bail hearing in federal court last week. The former chief executive of KB Home rubbed the shoulders of his visibly upset fiancee, Lilly Tartikoff, whispering in her ear and consoling her. By all appearances, you might not know that he was the one being forced to turn in his passport and pledge a Bel-Air mansion as collateral to make bail.

Former KB Home Chief Executive Bruce Karatz pleaded not guilty in federal court Monday to charges that he secretly backdated stock options to enrich himself, then concealed the scheme from regulators and investors. Karatz, 63, entered the plea during a brief court appearance before U.S. District Magistrate Judge Jeffrey W. Johnson in Los Angeles. Johnson scheduled a trial date for May 19.

These tables show 2006 compensation for chief executives of California's 100 largest public companies. The CEOs are ranked by total pay, which consists of cash pay (including salary and bonus), stock, stock options and other pay, which can include deferred compensation and such items as company-paid life insurance and the cost of an executive's personal trips on the corporate jet. The figures do not include deferred compensation cashed out in 2006 or profits from stock options exercised during the year because those things are considered to be pay from previous years.

Washington Mutual Inc., whose share price sank 70% last year as mortgage losses soared, said it awarded Chief Executive Kerry Killinger 3.2 million stock options for 2008. In a Securities and Exchange Commission filing, the largest U.S. savings and loan said its human resources committee granted the award to provide "a strong incentive to restore shareholder value." Killinger will not receive a bonus for 2007, the Seattle-based company said.

Citigroup Inc. awarded Chief Executive Vikram Pandit $26.7 million of shares and 3 million stock options, six weeks after he took over the largest U.S. bank and a week after Citigroup reported a record $9.83-billion quarterly loss. Citigroup said Pandit was awarded 1,094,949 shares under a company incentive plan adopted in 1999. He also received options to buy 1 million shares at $24.40 each, 1 million at $30.50 each and 1 million at $36.60 each.

A federal judge in Los Angeles has dismissed Broadcom Corp. co-founder Henry T. Nicholas as a defendant in a class-action lawsuit by shareholders over the backdating of stock options. Judge Manuel L. Real ruled that the 2008 lawsuit was filed beyond the statute of limitations, more than five years after Nicholas resigned in 2003 as chief executive of the Irvine chip maker. The plaintiffs allege that the company's stock price dropped on news and financial analysts' reports of problems with stock options in 2006.

A federal judge has postponed the criminal trial of Broadcom Corp. co-founder Henry T. Nicholas III until 2010, a delay the billionaire requested to help him prepare his defense against charges that he secretly manipulated stock options to reward employees. U.S. District Judge Cormac J. Carney scheduled Nicholas' trial for Feb. 9, 2010, in Santa Ana, according to a ruling made public this week.

Bank of America Corp. owes Kenneth D. Lewis, who is quitting as its chief executive at year's end, $68.8 million on his way out the door. Lewis accumulated that amount in his 40 years of work at Bank of America and predecessor companies. Topping the list of assets is a lump-sum pension benefit that was valued at $53.2 million in the bank's last public report on his holdings. That report, in a proxy filing this year, also said Lewis, 62, had $10.6 million in deferred compensation coming his way. And he will keep 305,000 shares of restricted stock that will vest over the next few years, which, at today's stock price of $16.34, is worth about $5 million.

WellPoint's former chief financial officer left in disgrace, but not empty-handed: His cash, options and retirement plans totaled $118.2 million, according to a federal regulatory filing Friday. The company even paid David Colby $116,692 for his unused vacation time. Colby, 54, resigned abruptly in May and has since been plagued by lawsuits tied to a string of romantic entanglements with women across the country. The bulk of his money came from $101.