Backdating stock options sounds to most people like an arcane, boring corporate boardroom issue. But when the resignation of a CEO is announced as federal officials are looking into more than $1.5 billion worth of unexercised stock options he holds, people pay attention.

UnitedHealth Group Inc.'s chief executive officer William McGuire is just one more high-profile executive to be caught up in the backdating-options scandal. The Associated Press reports that 30 top executives or board members at 16 companies have resigned over backdating options. More resignations or terminations can be expected as at least 135 companies have revealed that they are targets of investigations by the Securities and Exchange Commission or the Department of Justice.

McGuire joined the nation's second-largest health insurance company in 1989 and became CEO in 1991. He is credited with investments and innovations that grew the company and helped push the company's stock on a steadily rising path that would have turned a $10,000 investment in the stock in 1990 into a $2 million holding by late 1995.

To reward McGuire, the board of directors gave him the option to buy company stock at a predetermined price. Stock options can be a legitimate way to reward executives whose leadership can cause the stock price to rise. So, as shareholders benefit from a rising stock price, so does the top executive.

But the timing of the stock options granted to McGuire attracted attention when the granting price just happened to be at or near the all-time low price for the stock in three separate years. Most experts believe that this very-fortunate timing was not by accident. Companies that backdate options are basically cheating the system to further enrich their already well-paid executives. And other shareholders pay the price, essentially picking up the tab for these multimillion-dollar stock deals.

Backdated stock options also can force companies to restate earnings, often resulting in lower profits. And, if lower earnings for those years are reported, investors on Wall Street might decide to dump the stock, which lowers the price, hurting other shareholders.

But CEOs are not the only ones under fire. Numerous other top executives, including corporate lawyers and heads of human resources departments, have lost their jobs over backdating options. And as the investigations proceed, it is likely that attention will be focused on compensation committees of boards of directors and companies' outside auditors as well. There will be more fallout from the backdating-options scandal before the final stories are written.

McGuire continues to make news as reports on his regular compensation emerge. The board of directors at UnitedHealth is sharing the spotlight with McGuire over his $5.1 million-a-year retirement salary and other lucrative perks, including a $6.5 million lump-sum severance payment.

The backdating of options is another symptom of corner-office greed and the failure of boards of directors to protect the interests of shareholders at the expense of enriching executives. A number of industry experts suggest the backdating scandal will move beyond resignations and terminations to criminal prosecutions.

Given the golden severance packages, termination or resignation alone will not be enough to change such board and CEO misbehavior. Lawsuits and possible prison terms, such as those associated with the Enron and WorldCom scandals, might.

With McGuire holding (at the end of 2005)stock options valued at $1.78 billion — not million, billion — people have to wonder what UnitedHealth's board or compensation committee was thinking. Did McGuire not have enough with his multimillion-dollar salary and luxury perks? Were stock options worth $25 million not enough? Were options worth $100 million not enough? Were options of $500 million not enough?

Investors, particularly large groups such as pension funds, should press for more responsible behavior from boards of directors when it comes to compensating top executives. The backdating-stock-option scandal is revealing yet more wretched excesses in corporate America — excesses that will only be trimmed by lawsuits, prosecutions and prison time.