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Flu season is getting underway, and the backdating bug claimed the jobs of a couple more executives yesterday.

Altera Corporation (ALTR0 announced the departure of its long-time chief financial officer, and a restatement of its 2005 financials to incorporate the catch-up adjustment related to the findings of its special committee investigation of backdated options. According to the 8-K, the “restatement adjustments will total $47.6 million (pre-tax) and relate primarily to (1) stock option grant measurement date errors from December 1996 through February 2001 ($17.8 million), (2) stock option grant agreement modifications from 1996 to 2002 in connection with the termination of certain employees’ employment ($24.3 million), and (3) other adjustments ($5.5 million), principally related to the accounting for the Company’s service award program.” That’s a much different treatment than what the committee initially expected: they had planned on restating for the entire period instead of just one year with a catch-up adjustment.

If “Altera” and “options” in the same sentence ring a bell for you, they should. They famously excommunicated an analyst from conference calls because he dared to question the company’s use of capital - stock buybacks - for offsetting the dilution from option programs. There’s no small irony in the fact that the company is now going through the options restatement mill.

Just about a mile away, a couple more executives succumbed to the backdating bug at KLA-Tencor. KLA-Tencor will be restating financials from 1997 to 2002, and expects to record up to an additional $400 million of compensation expense due to improper dating of options.

Who hits the road? CEO Kenneth Schroeder and general counsel Stuart Nichols. They’re joined by board chairman and former CEO Kenneth Levy. The body count continues, and it shows that one of the early investor concerns over backdating investigations is coming to fruition: what happens to a firm if it loses management talent? Altera and KLA-Tencor are probably in no imminent danger - but the situation could be more critical at less-established firms whose executives catch the backdating flu.

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Source: KLA and Altera Execs Fall to Backdating Flu