WageWorks (WAGE) is in focus in pre-market trading following news that the company has set up a committee to examine an earlier investigation into financial irregularities at the employee benefits administrator. Separately, WageWorks said Chairman Joseph Jackson and board member Mariann Byerwalter have resigned. COMMITTEE, INVESTIGATION UPDATE: WageWorks said yesterday that it set up a committee to examine an earlier investigation into financial irregularities at the employee benefits administrator. The company is still in the process of reviewing its financial statements for 2017. The committee will have a minimum of three members, it said. As far as the company’s review of its financial statements, WageWorks said it is expected to result in an estimated aggregate decrease in 2016 revenue of $6.5M-$9.5M and an estimated aggregate decrease in net income of $3.5M-$5.5M. It noted that it has not identified any adjustments to its financial statements that would be expected to cause revenue for fiscal 2017 to differ materially from previous guidance. CHAIRMAN RESIGNATION: Also on Wednesday, WageWorks announced the resignation of executive chairman Joseph Jackson. He will be succeeded by Stuart Harvey. In April, Jackson stepped down as CEO, being succeeded by then president and COO Edgar Montes, with CFO Colm Callan and Kimberly Wilford, the company’s SVP, general counsel and corporate secretary, also resigning. The resignations were the result of an investigation into its financial controls that has delayed its 2017 annual report and damaged its valuation. The investigation had determined a revenue recognition problem associated with a big government contract in 2016, and its audit committee, along with independent professions, said it would look at whether “there was an open flow of information and appropriate tone at the top for an effective control environment.” Additionally on Wednesday, WageWorks said Mariann Byerwalter resigned as a Class II director and the company said its board is actively searching for an independent board member who will “have the right skill set to complement the current board.” GUIDANCE INITIATION: WageWorks said it currently expects year-over-year revenue growth for 2018 of 1%-4% and adjusted EBITDA margin of 28%-32%, excluding the impact of costs associated with the restatement efforts and any accounting adjustments. Revenue growth is expected to be driven by strong growth in the HSA product offering, partially offset by lower revenue from FSA and COBRA products, the company said. ANALYSTS DISAPPOINTED WITH GUIDANCE: WageWorks shares were downgraded at JMP Securities to Market Perform by analyst David Scharf, who said that, after talking with management, he is uncertain whether a contributing factor to the year-over-year revenue decline in the FSA and Cobra products will be recurring to some extent. His neutral bias takes into account the expected selloff in the shares today, the analyst noted. SunTrust analyst Tobey Sommer lowered his price target on WageWorks to $56 from $62 after the company offered FY18 guidance yesterday that he note was below the 7% growth assumed by consensus. The analyst also said that WageWorks’ continued delays in filing its financials is “disappointing,” but kept a Buy rating, stating that the company’s client attrition should slow given that the company has not “completed an acquisition since 2017.” Stifel analyst David Grossman lowered his price target to $55 from $64, telling investors that the 2018 guidance reveals “incremental deceleration” and that while Jackson’s resignation is not surprising, “we thought he would remain through the balance of the year.”