Posted on 06/30/2006 4:25:35 PM PDT by blam
Apple's Jobs caught up in US options scandal
(Filed: 30/06/2006)
Apple Computer has launched an internal investigation after admitting it may have manipulated stock-option grants to benefit executives, including chief executive Steve Jobs.
The admission wraps Apple into the unfolding business scandal that is spreading to some of America's best-known companies. At least 60 have now disclosed possible stock option irregularities.
Tainted: Steve Jobs may have been awarded a manipulated grant
Investigators are trying to determine whether companies inflated the value of stock options awarded to senior executives by backdating or timing the grants to coincide with days when the stock price was low.
Apple said it had started an internal investigation into grants made between 1997 and 2001, including one awarded to Mr Jobs. CA also said it will investigate grants to executives, and Intuit said it received a subpoena from the US attorney in Northern California.
Apple notified the US Securities and Exchange Commission and hired independent counsel to perform the investigation. The grant awarded to Mr Jobs was subsequently canceled and didn't result in a financial gain, Apple said.
Apple spokesman Steve Dowling told Bloomberg: "Our internal investigation was undertaken in response to general industry concerns about historical options granting processes at a number of companies. We're focused on resolving the matter as quickly as possible."
Mr Jobs received one of the biggest options grants ever in connection with his decision to become Apple's chief exectutive on Jan 5, 2000. The options were awarded a week later, when Apple stock had dropped 16pc.
Apple said at the time that Jobs's options would be worth $548m if the shares increased 5pc per year over a decade. Instead, Apple shares plummeted by more than 50pc in less than two years, making the options worthless.
In 2003, he voluntarily cancelled all of his options except the ones he had received as a director of the company. In exchange, Apple awarded 5m shares of restricted stock with an estimated value of $74.8m, according to proxy statements. Today the shares have a market value of almost $600m.
Todd Fernandez, senior research analyst at Glass, Lewis & Co, an investment research firm in San Francisco, said: "Given their position in the marketplace, for them to be potentially implicated definitely raises the profile of the scandal. If Jobs is implicated, it could take it to a much higher level, because he is an icon."
Suspiciously timed stock-option grants are a serious enforcement matter for the SEC, the Justice Department and the Public Company Accounting Oversight Board, said Damon Silvers, associate general counsel for the AFL-CIO labour federation.
There is mounting evidence that boards of directors are not functioning as they should at either small or large companies, he said. "The scale and scope of this practice is shocking. All the people who said that American business has fundamentally changed after Enron were wrong."
(Bloomberg)
Ah. More Culture of Corruption from Republicans. Oh wait Jobs is a lefty. Sorry.
Behind that "cool" image hides a lot of dark, dirty, mean sprited, greedy, egomaniacal @#$%&*.
No IPod 4 me.
ENRON!
New ad: "Bilk Different."
When Apple Computer first went public, Steve Wozniak gave much of his shares to other employees who had helped build the company. Steve Jobs kept all his stock for himself.
The movie that TNT showed a while back about the rivalry between Steve Jobs and Bill Gates had Jobs pegged pretty good. Being rich and a jerk is never a good combination.
Not quite true exactly. Woz allowed other employees to buy some of his shares at the pre-ipo price. It was pretty much a sure 3-4x gain when they went public. It was called the Woz plan.
Jobs has a level of arrogance that makes Lay and Skilling look downright meek. He believes he can do and get away with anything.
Jobs may be as evil as some on this thread have said he is, but he never made a penny from the stock options in question, and voluntarily gave up a great deal of stock options, which would have been worth billions today.
And his annual salary at Apple is $1.00.
I applaud entrepreneurs - call me crazy I guess but that's what made America (note - capitalism). As for being mean and nasty - that would apply to quite a few, past and present.
Give me a Jobs over a Scully any day.
I am sure the new york times will run a front page story on this. Perhaps Time will make the person who blew the whistle Person of the year. /sarcasm
I almost forgot. I am sure the media will make it known which democratic candidates recieved contributions. Perhaps a picture of him in the oval office with x42
He was Pixar's largest shareholder, and he is Disney's largest shareholder now.
In 2003, he voluntarily cancelled all of his options except the ones he had received as a director of the company. In exchange, Apple awarded 5m shares of restricted stock with an estimated value of $74.8m, according to proxy statements. Today the shares have a market value of almost $600m.
Yup, Republicans work hard to get rich, while liberals just get rich almost by accident.
More corruption with a Mac?
My husband worked for Gemstar/TV-Guide when their CEO and cheif financial officer messed around with the way they reported their accounting which then made the stocks soar. The SEC took them to court and they lost, big time.
Unfortunately, we had a lot of stock options that came tumbling down rather quickly. It was money that we thought we had. My husband could have retired if we sold when the stock was at its highest. We were in the middle of talking to a financial planner to find out how to handle all of the stock when it all came down on us.
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