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ISSIQUAH, Wash. - The board of Costco Wholesale Corp., last week to deny bonuses to president and c.e.o. Jim Sinegal and c.f.o. Richard Galanti, due to their responsibility for a stock options granting process that was found to have "imprecisions," according to a company filing with the Securities and Exchange Commission.
As previously disclosed by Costco, a special committee of the board of directors concluded that there were what it called "imprecisions" in the company's stock option granting process, and that Sinegal and Galanti had responsibility for administering that process. Because of their responsibilities for the "imprecisions" in the process and the resulting need for the board inquiry, the executive themselves had suggested that they not receive bonuses for fiscal 2006.
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Sinegal's bonus would have been $200,000, while Galanti's was set at $82,000.
Costco said probes by an internal committee, independent counsel, and forensics experts found no evidence of fraud in the implementation of the program. The company also said it doesn't expect to restate any of its previously filed financial results based on the findings of the review.