Apple fabricated board approval of grant to Jobs - report
Apple Computer chief executive Steve Jobs was awarded 7.5 million stock options in 2001 without the required authorization from the company's board of directors, according to a news report published Wednesday evening.
Citing "people familiar with the matter," the Financial Times website said documents "that purported to show a full board meeting had taken place to approve Mr Jobs' remuneration, as required by Apple's procedures, were later falsified."
Those records are now among the pieces of evidence being weighed by the Securities and Exchange Commission as it decides whether to pursue criminal charges against the company or its officials, the report added.
The stark allegation is the second in as many days related to the ongoing stock-options fiasco currently encompassing the Silicon Valley icon. It arrives on the heels of a similar report of falsified stock-options documents reported by The Recorder on Tuesday.
In its report, the Financial Times points to an Apple filing in 2002 which stated the options under review were handed to Jobs in October 2001, at an exercise price of $18.30 a share.
"However," the publication wrote, "the purported board authorisation was dated near the end of the year, suggesting that the benefits were both not properly authorised and were backdated."
Although Jobs later surrendered those options before they were exercised -- implying that he did not benefit from them -- he was later handed 10 million split-adjusted shares as a replacement.
In October, a financial columnist argued that while Jobs did not directly benefit from the initial grant, he did so on the ensuing exchange because the value of the 10 million shares were themselves based on favorably chosen "backdated" dates.
Apple spokesman Steve Dowling told the Associated Press on Wednesday that company has turned over to the Securities and Exchange Commission the results of its internal investigation into its historical stock options granting practices, but would not comment further.
Those results are expected to be disclosed in much detail as part of Apple's delayed 10-K for fiscal 2006, now due on Friday.
Citing "people familiar with the matter," the Financial Times website said documents "that purported to show a full board meeting had taken place to approve Mr Jobs' remuneration, as required by Apple's procedures, were later falsified."
Those records are now among the pieces of evidence being weighed by the Securities and Exchange Commission as it decides whether to pursue criminal charges against the company or its officials, the report added.
The stark allegation is the second in as many days related to the ongoing stock-options fiasco currently encompassing the Silicon Valley icon. It arrives on the heels of a similar report of falsified stock-options documents reported by The Recorder on Tuesday.
In its report, the Financial Times points to an Apple filing in 2002 which stated the options under review were handed to Jobs in October 2001, at an exercise price of $18.30 a share.
"However," the publication wrote, "the purported board authorisation was dated near the end of the year, suggesting that the benefits were both not properly authorised and were backdated."
Although Jobs later surrendered those options before they were exercised -- implying that he did not benefit from them -- he was later handed 10 million split-adjusted shares as a replacement.
In October, a financial columnist argued that while Jobs did not directly benefit from the initial grant, he did so on the ensuing exchange because the value of the 10 million shares were themselves based on favorably chosen "backdated" dates.
Apple spokesman Steve Dowling told the Associated Press on Wednesday that company has turned over to the Securities and Exchange Commission the results of its internal investigation into its historical stock options granting practices, but would not comment further.
Those results are expected to be disclosed in much detail as part of Apple's delayed 10-K for fiscal 2006, now due on Friday.
Comments
This all seems to be much ado about nothing. Just another chance for the pigeons to get spooked and sell so that the falcons can swoop in and grab cheap shares.
Yeah. Or it could be the slow tightening of the noose. Hope not.
BIG SELL OFF ON APPLE! [STOP]
JOBS GOING TO JAIL! [STOP]
IMACS SCREENS ACROSS THE COUNTRY FREEZE! [STOP]
PANIC!!! [STOP]
SELL, SELL, SELL! [STOP]
I can't wait to see the sell off tomorrow so that I can load up on cheap Apple stock. Jobs is fine since it will be damn near impossible to prove that Jobs ordered back-dating. Slap on the wrist.
Coming soon:
Ipod Phone
Next Gen Ipod
more Mac growth
The panic of the masses tomorrow will be the wealth of the cool few the next day.
Since I know nothing about financial law maybe someone in the know can tell us what this means ... is Steve going to jail and thus Apple is doomed?
So far, Wall Street types don't think it's likely that Jobs would be ousted. Just a potentially big hit to the restated earnings and a slap on the wrist.
It doesn't take Jobs to be proved guilty for him to be ruined...
How so?
I know it's a bad joke, but someone was going to say it sooner or later.
Hasn't the market already priced this into Apple's stock, that has already responded and corrected for this news multiple times?
Didn't a Bloomberg reporter reckon that Steve jobs should return "Some $85 million or so that the chief executive officer collected because of a sleight-of-hand [Apple] engaged in when it awarded Jobs some mammoth stock option grants," back in October?
Why wouldn't Apples' board award the saviour of Apple generously and without hesitation?
Why is Jobs "blindly" awarded options ???
Does anyone remeber where Apple was - in every respect, back when Gil Emilio took over, just before Steve Jobs came back and NeXT was purchased by Apple?
Does anyone of the gossip mongering pundidts realize that since the day Jobs came back and devoted himself to Apple's turnaround and current glory, he has waived his salary and has recieved $1 per year symbolic compensation for all his vision and devotion?
Compare that to the the "annual bonus" Goldman Sach's Chairman just recieved of $53.4 million (!!!) for the year 2006 - this in addition to his $660,00 a year salary (!) and figure out how much Apple saved by not paying Jobs.
It would be nice to see people who understand the company they write about professionally and even nicer to know that they get it.
This is more fear mongering to create a panic, so that the greed can get in on a fire sale...
This is a storm in a tea cup - Apple is still the envy of those that cannot do.
the option grant was well-publicized, and would've been seen by the board almost immediately. the Board would've realized--immediately--that no approval of millions of dollars in options had ever been approved.
this is standard practice. Boards of this caliber are not stupid. anybody "fabricating" approval would've realized the severe repurcussions of doing so. And, a simpler point--the board would've almost vertainly approved it anyway.
once again, another nonsense post by AppleInsider.
BE STRONG AND KEEP YOUR HEAD, MAC HEADS.
Be like Rocky
SBC and AT&T merge, Verizon and Wallmart devour the country and the SEC (or at least these "lawyer" "analysts" or "analyers") are jumping all over Apple for back-dating. Dumb a**es.
Unfortunately, yes, this is a panic before the firesale, and Yes, there WILL be a firesale. That is the point of news like this. Look at the numbers and Apple is an awesome company yet to hit its peak. Incredible considering what the company is currently doing, and expected to be releasing very soon. Unfortunately, Steve Jobs is an icon and ordinary people (READ: stock-holders, the average Joe type), freak out when the man sneezes. This is the kind of opportunity that the bid dawgs like to exploit for a rapid devaluation of the stock price for the benefit of THE MAN who trades big day in and day out. Sanity will return after the full financial report on Friday, then all you will read about will be how the iPod rules, and how the iPod Phone is going to be big, and how the halo effect is affecting and infecting the brain neurons of the masses and compelling them to buy Macs. Rapid price increases return, as they have for no apparent reason, and then the big dawgs cash in with BIG PROFITS. Having closely followed the stock for damn near a decade I am used to the pattern. Apple is the perfect stock to play with because it has an upside that is difficult to avoid (great products and profit margin, company management, etc) and a downside that does not inspire (3% market share, need I say more?), in addition to the all powerful rumours!
BE STRONG AND KEEP YOUR HEAD, MAC HEADS.
Be like Rocky
Well said. The hedge fund mangers are ending the year and going out with big profits on this one. They made millions today and will make millions tomorrow.
This story was a deliberate leak with little evidence to back up the fradulent document.
Apple better come out with some statement tomorrow or the stock will tank once again and stay there for a while. Until Friday.
This reminds me of when the market made big moves of over 100 points with each story or concern back about 4 years ago.
That said, I'm hoping he did not in fact conspire. But that it involves him at all, is not good. What is worse, is that he still ultimately profited from this (read the article carefully)... and that is bad, bad, bad.
If confirmed, this is a major negative.
And it has nothing to do with the stock price - stock goes up, and it goes down. But when Jobs is involved, this is FAR more serious than stock price.
Wake up, folks. This is *serious* business and a very bad development. Hopefully it doesn't get worse, but it's bad enough.
Messing with the SEC is serious business.
Granted, Steve Jobs very nearly *is* Apple, so ousting him doesn't look likely...
Granted, Steve Jobs very nearly *is* Apple, so ousting him doesn't look likely...
Although Steve's an icon, he should be following the rules of the game. If he were to be found guilty, then he should accept the consequences. That is a part of the game. I will miss his legendary keynotes though?
It's not gonna be the end of Apple, as they will allready have plan B up in their sleeves. However, I do hope they won't take the chubby Shiller route, but instead will put Jonathan Ive in front.
As for tomorrow, my thoughts will be with Steve. The past may be imperfect, the future is gonna be tense