Backdating options was the *NORM* for many companies until the SEC called shenanigans this past year, and requested that all companies restate the last few years of quarters under the new guidelines. Basically, amnesty has been granted to all companies so far, unless they were egregious about it. The rules changed, and the SEC has wanted a smoother history of reporting for investors to be able to rely on. That's business.
The *ONLY* thing about this that is dicey is the apparently forged board approval for a date when the board didn't meet. If that date had been correct, this would be a complete non-issue. Apple's executive compensation board, unlike many companies, is independent from the CEO's office... and no one raised a stink after the fact, leading to a de facto approval by the board anyway. Note that prior counsel and CFO have both resigned... there are your fall guys, sad but true.
To those who are crying that Jobs should go over this... please. As a stockholder, I am *VERY* thrilled with the performance of my investment, and this is a drop in the bucket.
Non-issue, as far as I'm concerned. The market seems to agree. I suspect the SEC will as well. We'll find out tomorrow when the full investigation report is made public.
It is the journalists who are asserting that the stock grant was a "replacement" and an
"exchange". Remember that Jobs receives a salary of $1 per year. His real compensation
is always in stock or options. Every year he gets paid in equity. You may call it "profit",
but many would call it "compensation". (unless you are arguing that $1 per year is all
he SHOULD be compensated)
The problem is not that Jobs was awarded stock options. Indeed the awarding of stock options to anybody was never a problem. The problem was BACKDATING and more generally the levels that were picked as the basis of the awarding. Jobs profited from ILLEGAL aspects of the awarding. First they falsified papers to get a good level - and when that was exposed, Jobs returned *those* options, but got new ones that used the old basis! The problem lies in that basis. It's just stupid to say "well he has the right to be rewarded". Yes he does, but using legal means, not falsified paperwork and not levels that were arrived at by using such means. And whether that was pointed out by a journalist or not is irrelevant. It could be the janitor that found that out, and it would be just as valid. Not who, but what.
Again, this is bad. What we don't know is to what extent Jobs was involved personally. If he had any part in conceiving or promoting illegal activities, he'll be finished. If he only benefitted from illegal activities without being aware of their illegal nature, he'll be hurt, badly, but will probably survive.
Err... no. Pay attention. He did profit from this.
Quote from the story:
"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.
I don't understand this bit. He didn't profit directly from the backdated options, unless the new options were backdated too. That's not the problem I have with the case, I'm more concerned about the falsified documents.
The problem is not that Jobs was awarded stock options. Indeed the awarding of stock options to anybody was never a problem. The problem was BACKDATING and more generally the levels that were picked as the basis of the awarding. Jobs profited from ILLEGAL aspects of the awarding. First they falsified papers to get a good level - and when that was exposed, Jobs returned *those* options, but got new ones that used the old basis! The problem lies in that basis. It's just stupid to say "well he has the right to be rewarded". Yes he does, but using legal means, not falsified paperwork and not levels that were arrived at by using such means. And whether that was pointed out by a journalist or not is irrelevant. It could be the janitor that found that out, and it would be just as valid. Not who, but what.
Again, this is bad. What we don't know is to what extent Jobs was involved personally. If he had any part in conceiving or promoting illegal activities, he'll be finished. If he only benefitted from illegal activities without being aware of their illegal nature, he'll be hurt, badly, but will probably survive.
First, just for information, I think the equity Jobs got after returning the options was restricted stock, not more options. I don't know if he has sold any of the stock, which he would have to do to realize a profit.
I was not saying that the observation of wrongdoing was invalid because it was made by journalists, I was saying that the characterization of the transaction as an "exchange" may be incorrect and that it was the journalists' interpretation of what happened. It makes it sound more evil, but it might not be the way it happened. It could have been that the CFO called
Steve and said, "yo Steve, we need you to return those options to correct some paper work"
and Steve said "ok, will do", knowing that he would continue to be paid on a regular basis
per his employment agreement.
I agree that it is bad, I just am not convinced Jobs played an active part in the backdating.
We need to know who this nebulous "they" is before we can try to predict the damage.
If it turns out that everything was done under the direction of the CFO and corporate counsel,
who are no longer with the company, I don't believe Jobs will be hurt much at all and AAPL stock should recover completely.
That's the second time today I have been called stupid. Lucky I am too stupid to believe it
Backdating options was the *NORM* for many companies until the SEC called shenanigans this past year, and requested that all companies restate the last few years of quarters under the new guidelines. Basically, amnesty has been granted to all companies so far, unless they were egregious about it. The rules changed, and the SEC has wanted a smoother history of reporting for investors to be able to rely on. That's business.
The *ONLY* thing about this that is dicey is the apparently forged board approval for a date when the board didn't meet. If that date had been correct, this would be a complete non-issue. Apple's executive compensation board, unlike many companies, is independent from the CEO's office... and no one raised a stink after the fact, leading to a de facto approval by the board anyway. Note that prior counsel and CFO have both resigned... there are your fall guys, sad but true.
To those who are crying that Jobs should go over this... please. As a stockholder, I am *VERY* thrilled with the performance of my investment, and this is a drop in the bucket.
Non-issue, as far as I'm concerned. The market seems to agree. I suspect the SEC will as well. We'll find out tomorrow when the full investigation report is made public.
I will be among the thrilled if you are right -- and I hope you are. Tomorrow (or sometime during the few weeks) will tell.
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.
You must be a big stockholder. Ado about nothing?. Ask Ken Lay that question!. Yes, this is nothing like what Ken Lay did, I am aware of that but financial impropriety is not trivial. The government is usually not amused.
Actually Apple has a 5.8% marketshare among desktops and 12% among Notebooks. Please stay current on marketshare people! It is growing and your going to look silly spouting 3% when Apple grows to 20% :-)
Other than that I think your right on! :-)
Quote:
Originally Posted by olmalove
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!
Actually Apple has a 5.8% marketshare among desktops and 12% among Notebooks. Please stay current on marketshare people! It is growing and your going to look silly spouting 3% when Apple grows to 20% :-)
I don't see the problem, the figures are not wrong. Your figures are for the US only. The 3% figure is about right for worldwide. Thanks for calling them notebooks though.
Gotta disagree a wee little bit. Getting into legal trouble with the SEC for fraud, theft, misleading, whatever, is courting disaster. I don't think that any listed, publicly held company like Apple and Jobs can take that risk.
There are obvious exceptions like Enron, but they were headed over the cliff anyway. They got into legal trouble for their stealing ways as the roof was coming down. Apple is on a market run and I can't believe that those stock options would be worth the damage. Look at what happened to AAPL stock in the days that their legal trouble was announced: from 92 to 82 with 900 million shares outstanding of means a change in market value of 9 billion dollars.
True, but look at the more general landscape - with the exception of the fraudulent board meeting, Apple is one of *dozens*, probably *hundreds* of companies going through this at the moment. The SEC is cracking down on a widespread and, until recently, semi-accepted practice. It wasn't quite kosher, but it was ignored. Rules changed, and a lot of companies are going through this process. The SEC is only actively going after egregious abuses or serious problems.
Even the bogus board meeting isn't a *huge* issue, in comparison, because it was later ratified by lack of comment by the board. Bad? Yes. It needs to stop, and it looks like it will. Something the SEC is going to single out and prosecute? Likely not. And if they do, previous counsel and CFO are the two that are the most likely targets, not the current board or CEO.
Comments
Backdating options was the *NORM* for many companies until the SEC called shenanigans this past year, and requested that all companies restate the last few years of quarters under the new guidelines. Basically, amnesty has been granted to all companies so far, unless they were egregious about it. The rules changed, and the SEC has wanted a smoother history of reporting for investors to be able to rely on. That's business.
The *ONLY* thing about this that is dicey is the apparently forged board approval for a date when the board didn't meet. If that date had been correct, this would be a complete non-issue. Apple's executive compensation board, unlike many companies, is independent from the CEO's office... and no one raised a stink after the fact, leading to a de facto approval by the board anyway. Note that prior counsel and CFO have both resigned... there are your fall guys, sad but true.
To those who are crying that Jobs should go over this... please. As a stockholder, I am *VERY* thrilled with the performance of my investment, and this is a drop in the bucket.
Non-issue, as far as I'm concerned. The market seems to agree. I suspect the SEC will as well. We'll find out tomorrow when the full investigation report is made public.
It is the journalists who are asserting that the stock grant was a "replacement" and an
"exchange". Remember that Jobs receives a salary of $1 per year. His real compensation
is always in stock or options. Every year he gets paid in equity. You may call it "profit",
but many would call it "compensation". (unless you are arguing that $1 per year is all
he SHOULD be compensated)
The problem is not that Jobs was awarded stock options. Indeed the awarding of stock options to anybody was never a problem. The problem was BACKDATING and more generally the levels that were picked as the basis of the awarding. Jobs profited from ILLEGAL aspects of the awarding. First they falsified papers to get a good level - and when that was exposed, Jobs returned *those* options, but got new ones that used the old basis! The problem lies in that basis. It's just stupid to say "well he has the right to be rewarded". Yes he does, but using legal means, not falsified paperwork and not levels that were arrived at by using such means. And whether that was pointed out by a journalist or not is irrelevant. It could be the janitor that found that out, and it would be just as valid. Not who, but what.
Again, this is bad. What we don't know is to what extent Jobs was involved personally. If he had any part in conceiving or promoting illegal activities, he'll be finished. If he only benefitted from illegal activities without being aware of their illegal nature, he'll be hurt, badly, but will probably survive.
Err... no. Pay attention. He did profit from this.
Quote from the story:
"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.
I don't understand this bit. He didn't profit directly from the backdated options, unless the new options were backdated too. That's not the problem I have with the case, I'm more concerned about the falsified documents.
The problem is not that Jobs was awarded stock options. Indeed the awarding of stock options to anybody was never a problem. The problem was BACKDATING and more generally the levels that were picked as the basis of the awarding. Jobs profited from ILLEGAL aspects of the awarding. First they falsified papers to get a good level - and when that was exposed, Jobs returned *those* options, but got new ones that used the old basis! The problem lies in that basis. It's just stupid to say "well he has the right to be rewarded". Yes he does, but using legal means, not falsified paperwork and not levels that were arrived at by using such means. And whether that was pointed out by a journalist or not is irrelevant. It could be the janitor that found that out, and it would be just as valid. Not who, but what.
Again, this is bad. What we don't know is to what extent Jobs was involved personally. If he had any part in conceiving or promoting illegal activities, he'll be finished. If he only benefitted from illegal activities without being aware of their illegal nature, he'll be hurt, badly, but will probably survive.
First, just for information, I think the equity Jobs got after returning the options was restricted stock, not more options. I don't know if he has sold any of the stock, which he would have to do to realize a profit.
I was not saying that the observation of wrongdoing was invalid because it was made by journalists, I was saying that the characterization of the transaction as an "exchange" may be incorrect and that it was the journalists' interpretation of what happened. It makes it sound more evil, but it might not be the way it happened. It could have been that the CFO called
Steve and said, "yo Steve, we need you to return those options to correct some paper work"
and Steve said "ok, will do", knowing that he would continue to be paid on a regular basis
per his employment agreement.
I agree that it is bad, I just am not convinced Jobs played an active part in the backdating.
We need to know who this nebulous "they" is before we can try to predict the damage.
If it turns out that everything was done under the direction of the CFO and corporate counsel,
who are no longer with the company, I don't believe Jobs will be hurt much at all and AAPL stock should recover completely.
That's the second time today I have been called stupid. Lucky I am too stupid to believe it
Sturm und drang...
Backdating options was the *NORM* for many companies until the SEC called shenanigans this past year, and requested that all companies restate the last few years of quarters under the new guidelines. Basically, amnesty has been granted to all companies so far, unless they were egregious about it. The rules changed, and the SEC has wanted a smoother history of reporting for investors to be able to rely on. That's business.
The *ONLY* thing about this that is dicey is the apparently forged board approval for a date when the board didn't meet. If that date had been correct, this would be a complete non-issue. Apple's executive compensation board, unlike many companies, is independent from the CEO's office... and no one raised a stink after the fact, leading to a de facto approval by the board anyway. Note that prior counsel and CFO have both resigned... there are your fall guys, sad but true.
To those who are crying that Jobs should go over this... please. As a stockholder, I am *VERY* thrilled with the performance of my investment, and this is a drop in the bucket.
Non-issue, as far as I'm concerned. The market seems to agree. I suspect the SEC will as well. We'll find out tomorrow when the full investigation report is made public.
I will be among the thrilled if you are right -- and I hope you are. Tomorrow (or sometime during the few weeks) will tell.
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.
You must be a big stockholder. Ado about nothing?. Ask Ken Lay that question!. Yes, this is nothing like what Ken Lay did, I am aware of that but financial impropriety is not trivial. The government is usually not amused.
Other than that I think your right on! :-)
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
Actually Apple has a 5.8% marketshare among desktops and 12% among Notebooks. Please stay current on marketshare people! It is growing and your going to look silly spouting 3% when Apple grows to 20% :-)
I don't see the problem, the figures are not wrong. Your figures are for the US only. The 3% figure is about right for worldwide. Thanks for calling them notebooks though.
There are obvious exceptions like Enron, but they were headed over the cliff anyway. They got into legal trouble for their stealing ways as the roof was coming down. Apple is on a market run and I can't believe that those stock options would be worth the damage. Look at what happened to AAPL stock in the days that their legal trouble was announced: from 92 to 82 with 900 million shares outstanding of means a change in market value of 9 billion dollars.
That is a lot of money, even to me...!
Even the bogus board meeting isn't a *huge* issue, in comparison, because it was later ratified by lack of comment by the board. Bad? Yes. It needs to stop, and it looks like it will. Something the SEC is going to single out and prosecute? Likely not. And if they do, previous counsel and CFO are the two that are the most likely targets, not the current board or CEO.