Apollo Group — a Phoenixbased company that provides higher education nationally and internationally, including the University of Phoenix — is challenging a report alleging it engaged in questionable stock option activity.
The report, issued Thursday by Lehman Brothers, questioned whether the Apollo Group backdated four stock option grants during fiscal 2000-04, an action that raises issues about the possible financial benefits of its executives by offering shares at lower prices.
But the Apollo Group said in a statement that the stock option grants it offered “included a large number of employees and not just senior executives.”
“Management believes that it has complied with all applicable laws, including the (filing requirements) mandated by legislation in granting options to officers and it has not backdated options,” Apollo Group said in its statement.
After performing a review of its stock option practices, Apollo said that it plans to hire an outside firm to review the report.
The company’s shares on the Nasdaq closed at $54.71 Monday, an increase of 95 cents or 1.77 percent.
Apollo Group has been providing higher education programs for nearly 30 years.
It offers programs and services to 95 campuses and 153 learning centers in 30 states as well as Puerto Rico, Alberta, British Columbia, the Netherlands and Mexico.
It has more than 281,000 students at colleges, including the University of Phoenix, Institute for Professional Development, The College for Financial Planning Institutes Corp. and Western International University, and is the largest private institution of higher education in the United States.
Brian Mueller, Apollo Group president, in March announced a slight jump in enrollment and outlined a new marketing program aimed at potential students aged 18 to 24 to help boost declining enrollment.
His announcement came after a slight drop in earnings — and a severance package of $18 million given to Todd S. Nelson, who left the company after five years as chief executive officer.
He said, however, that enrollment of students on the Internet increased nearly 21 percent for the second quarter.