SiliconBeat

Lam Research’s chief executive, Stephen Newberry, finally became an outright owner of his company’s stock last month when he exercised an option to buy 5,250 shares of the company for $11.66 each, or $61,215. The shares were the last left in an option granted to him 10 years ago that were to expire Thursday.

Newberry hasn’t owned any of his company’s stock for at least five years, based on a review of the company’s proxies, which show all of his equity in the company being unexercised option grants but none he owned outright.

Newberry has profited handsomely from exercising his options and then selling them during this time, having netted $11 million in fiscal 2004, $9.2 million in fiscal 2005 and $37.5 million in 2006 from option exercises.

In July 2007, Lam’s board of directors formed an independent committee to investigate the company’s stock option grants from 1997 through 2005. The investigation, which included the review of millions of documents and scores of interviews with Lam’s current and former directors, officers and employees, concluded that numerous options grants were mispriced, including a new-hire grant given to Newberry when he joined Lam in August 1997.

The company restated results earlier this year to add $96.4 million in extra non-cash compensation expense from 1997 through 2006. The investigation itself cost $9.5 million, and in March, the company estimated it would pay Newberry $10.3 million to cover the extra tax he owed on mispriced options he had exercised and sold.

Although not implicated in any wrongdoing in the matter, Newberry received a rebuke of sorts from shareholders at its last annual meeting in June when less than 60 percent of shares were voted in favor of his re-election to the board, compared with an average of 95 percent for the other 9 nominees.