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RANDOM THOUGHTS 134
April 17, 2007
Getty Completes Investigation of Equity Compensation Grant Practices
Getty Images, Inc. has completed its internal investigation of practices in the way it has granted stock options to employees. The investigation was started in November 2006 as a result of an SEC "informal inquiry" into possible violations. A Special Committee of the Board of Directors and independent outside legal counsel have concluded that while there had been backdating, "the evidence obtained and reviewed did not establish any intentional wrongdoing."
The company will be restating earnings as a result of these findings and the restatement will involve "pre-tax, non-cash stock-based compensation of between $28 and $32 million." About 95% of this figure will be expensed in 2002 and earlier years.
"The use of incorrect measurement dates resulted from a number of reasons, including delays in the approval of awards, the absence of definitive documentation and modifications of previously awarded grants. The special committee also identified certain awards for which grant dates were selected retroactively," the company said.
In connection with this matter, shareholder lawsuits have alleged three federal violations, including securities fraud, and accused the directors and officers of giving themselves and others stock-option grants that time after time coincided with lowest share prices of that period. "In fact, in a striking pattern, 21 out of 25 discretionary grants made from April 1999 to February 2002 coincided with historically low closing prices," one lawsuit stated.
Getty is one of more than 100 companies being investigated by the SEC for falsifying the date stock options were granted to boost profit when the recipient cashes them in.
The company has reviewed its practices for the period between July 14, 1994 and November 1, 2006 and examined 7,102 stock option grants and 1,062 restricted stock unit ("RSU") grants made on 465 occasions. The committee and the company have determined that it is necessary to revise the measurement dates for approximately 3,700 of the grants made on approximately 130 occasions and determined that nearly all of the grants for which the measurement dates were changed (approximately 98% of the grants) were awarded in 2001 and earlier years.
As a result of this investigation the Company "has decided to implement certain remedial measures recommended by the Special Committee and endorsed by the Board of Directors in order to ensure reliability, transparency and accuracy in its equity compensation grant practices and accounting for its equity compensation program going forward."
OJO Images Launched
Jonathan Gibson has announced the launch of. OJO Images (
www.ojoimages.com), an independent premium royalty-free company. Gibson has joined forces with a group of the world's most acclaimed photographers including Chris Ryan, Robert Daly and Chris Newton, Matt Hind, Martin Barraud and Justin Pumfrey to produce high-end, wholly owned premium royalty-free imagery.
OJO Images plans to deliver more than 7,000 images across 70-plus Virtual CD titles in 2007 and produce more than 15,000 images over the next 18 months. Given the quality of the photographers already onboard, the company has recently signed distribution agreements with both Getty Images and Masterfile and is looking for other distribution outlets to represent the brand.
Gibson previously spent 6 years at Dynamic Graphics and Jupiterimages, managing Jupiterimages royalty-free, rights-managed and subscription brands through global distribution channels. He most recently served as Vice President of Distributor Sales until leaving the company in April 2007.
OJO is Spanish for "eye" and Gibson says soon buyers will be seeing the difference. For more information about OJO Images or to preview the new collection please contact jgibson@ojoimages.com (
www.ojoimages.com).
Jupiterimages Update
Jupiter has recently introduced its BYOCD program that offers customers the ability to build custom CDs of 10, 25, 50 or 100 images with prices from $20 to $50 per image. Customers are now able to access quality stock images produced by professional photographers at a fraction of their retail price.
According to Alan Meckler on his blog RM sales for Jupiterimages are growing significantly. He attributes this to the significant expansion of their sales team last March (about 30 people) and their international sales offices in England, France, Germany, Spain, and Australia.
The JupiterImagesUnlimited product line now offers nearly 600,000 wholly owned RF images. While this service can be purchased online without the aid of a sales person, Meckler says that in most cases it is the sales team that closes the sales for this service and seat licenses are sold with most transactions.
Ron Chapple Blog
Ron Chapple has a new blog at (
www.ronshoots.com). Ron is a former FPG photographer who established the RF company Thinkstock and then sold it to Jupiterimages in 2004 for $4 million.
Ron has done it all in stock photography and has usually been ahead of the trends. His insights into the industry should be informative and interesting.
OnRequest Images Raises $9M
OnRequest Images Inc. (
www.onrequestimages.com) has raised $9 million in funding from a series of investors including Menlo Ventures of Menlo Park, Calif., Maveron LLC of Seattle, and Frazier Technology Ventures of Seattle. The company will use the money "to expand its sales and marketing efforts."
OnRequest provides companies with "original, brand-centric" photography that other companies can't use.
On its Web site, it shows what can happen if stock photography available to any company is used. It points to two advertisers that used the same stock photograph of a man in their ads -- Met Life and the erectile drug Viagra.
As part of the latest round of financing, H. Dubose Montgomery of Menlo Ventures will join OnRequest Images' board of directors.
Stock Image Market Sizing Report Released
The Industry Measure (formerly TrendWatch Graphic Arts) has released an update to its popular "Stock Industry Market Sizing" report. The company collected data from graphic arts firms, creative firms, publishers and Internet design and development firms. Some key finding in this report are:
- In three out of the four marketplaces surveyed, respondents were moving toward single-sourcing of stock images. Among creative firms, the percentage single sourcing rose from 28% to 38%.
- In three out of the four marketplaces surveyed, "price of images" is declining as a major factor in choosing a stock image provider. Among publishers, for example, this dropped from 90% citing price as a key deciding factor to 82%.
- In the creative markets, graphic designers dominate the rights-managed image market by units (54%), but the market by dollars is dominated by ad agencies (43%), based on their significantly higher monthly expenditures.
While the report may indicate a slight trend there is still a significant percentage of respondents that look to multiple sources to find their images and where price is still a key deciding factor.
The Industry Measure "Stock Image Market Sizing: 2007" report is available for purchase by visiting the secure The Industry Measure eStore online at (
www.theindustrymeasure.com)or by phone at 866-873-6310. The price for the report is $995. The Industry Measure eStore customers can download this report in PDF Acrobat format immediately after purchase.