Navistar Inc.’s top executive and its former finance chief will return more than $2 million in bonus pay to the company as part of a deal to settle federal charges of accounting misconduct.
Daniel Ustian, the truck maker’s president, chairman and chief executive officer, will turn over $1.3 million in stock to the company, and former Chief Financial Officer Robert Lannert will pay Navistar about $1 million in cash, the Securities and Exchange Commission said Thursday.
The recompense that the two executives must make to Navistar is tied to the company’s restatement of certain financial results in periods from 2001 to 2005.
Under federal law, if a publicly traded company has to restate its financial results because the original results do not comply with SEC rules, the company’s CEO and CFO may be required to forfeit bonus pay accrued during the restated periods.
“At times from 2001 through 2005, Navistar overstated its pre-tax income by a total of approximately $137 million as the result of various instances of misconduct,” the SEC wrote in its order.
Ustian and Lannert were ultimately responsible for that misconduct, the SEC said, but the agency noted that its findings “do not reflect a coordinated scheme by senior management to manipulate the company’s reported results or conduct committed with the intent of personal gain.”
“The settlement allows the company to put this matter behind us,” said Navistar spokesman Roy Wiley. He added that “The events underlying [the settlement] have been completely investigated by the SEC since 2006. Our own board of directors conducted an internal investigation and it found nothing wrong.”
Navistar, Warrenville, Ill., ceased filing financial reports for almost two years between 2005 and 2007 while it worked to correct and restate mistakes in earlier filings.
In the process, the company severed its relationship with the outside auditor that it had used for 98 years and was briefly kicked off of the New York Stock Exchange, where its common shares had been listed for more than a century.
