Apple probe finds stock option grant irregularities
Apple Computer said on Thursday that an internal investigation has discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001.
One of the grants in question was to chief executive Steve Jobs, but it was subsequently cancelled and resulted in no financial gain to the CEO, the company said.
A special committee of Apple's outside directors has hired independent counsel to perform an investigation and the company has informed the Securities and Exchange Commission.
"Apple is a quality company, and we are proactively and transparently disclosing what we have discovered to the SEC," said Jobs. "We are focused on resolving these issues as quickly as possible."
Apple executives have been instructed to offer no further comments on the matter until the independent investigation is concluded.
One of the grants in question was to chief executive Steve Jobs, but it was subsequently cancelled and resulted in no financial gain to the CEO, the company said.
A special committee of Apple's outside directors has hired independent counsel to perform an investigation and the company has informed the Securities and Exchange Commission.
"Apple is a quality company, and we are proactively and transparently disclosing what we have discovered to the SEC," said Jobs. "We are focused on resolving these issues as quickly as possible."
Apple executives have been instructed to offer no further comments on the matter until the independent investigation is concluded.
Comments
Originally posted by Ireland
Was this topic necessary?
Yes, dummy, because SEC investigations are serious, and the financial impact of governmental fines would affect the company.
Originally posted by Ireland
Was this topic necessary?
Yes, because Apple is a quality company.
Originally posted by Ireland
Was this topic necessary?
Anything that doesn't praise the all-mighty Apple is not necessary, right?
Originally posted by Gene Clean
Anything that doesn't praise the all-mighty Apple is not necessary, right? [/B]
In the view of our friendly neighbor Ireland, topics are obviously only relevant if they praise Apple, or if they criticize that Apple's main market happens not to be Ireland.
"The troublesome stock options included a batch that went to Apple co-founder Steve Jobs, but the chief executive canceled those awards in March 2003 before he cashed them in to realize a gain. Jobs surrendered all of his outstanding options in exchange for 5 million shares of Apple stock now worth $295 million."
Thius could be the end of Steve Jobs.
Originally posted by Johnny Mozzarella
Yes, because Apple is a quality company.
The stock option news, released after the market closed, appeared to jar investors. Apple shares surged $2.95, or 5.3 percent, to close at $58.97 on the Nasdaq Stock Market, then retreated by $1.42 in extended trading.
Most of the stock option investigations so far have revolved around a practice known as "backdating."
This occurs when a handful insiders retroactively decide to set a stock option's exercise price at an ebb in a company's stock price instead of pegging the exercise price to the prevailing market value at the time of the award.
Stock options become more valuable as the market price rises above the exercise price, so backdating fattens the recipient's profit.
Backdating stock options isn't necessarily illegal, but it can cause a company to improperly deduct employee compensation expenses -- a misstep that could exaggerate profits and result in an underpayment of taxes.
If the backdating isn't properly disclosed, regulators also might interpret the action as a form of financial fraud, exposing companies to civil penalties and a raft of shareholder lawsuits.
Apple didn't say whether its stock option trouble involved backdating.
Meanwhile, two other Silicon Valley companies disclosed widening investigations into their previously disclosed backdating issues. Both Mountain View, Calif.-based Intuit Inc. and Foster City, Calif.-based Equinix Inc. said they had received Justice Department subpoenas seeking more information about their past stock options.
Originally posted by Johnny Mozzarella
Yes, because Apple is a quality company.
Does that make your post quality humor?
Originally posted by m01ety
Yes, dummy, because SEC investigations are serious, and the financial impact of governmental fines would affect the company.
Why say dummy? You wouldn't say it to my face. (I don't want to argue online cause it's ridiculous so let's take this outside)
Originally posted by Chucker
In the view of our friendly neighbor Ireland, topics are obviously only relevant if they praise Apple, or if they criticize that Apple's main market happens not to be Ireland.
What the hell are you talking about? This time you've lost the plot.
Originally posted by Ireland
What the hell are you talking about? This time you've lost the plot.
Why was the original post unneccesary, in your eyes?
Originally posted by Ireland
Why say dummy? You wouldn't say it to my face.
I most certainly would, and most certainly did. The term, while comparatively benign compared to alternative expressions readily available to me, accurately expressed that your disregard for the severity of news involving the company and the SEC is, quite simply, foolish.
Originally posted by blabla
http://biz.yahoo.com/ap/060629/apple...ions.html?.v=3
"The troublesome stock options included a batch that went to Apple co-founder Steve Jobs, but the chief executive canceled those awards in March 2003 before he cashed them in to realize a gain. Jobs surrendered all of his outstanding options in exchange for 5 million shares of Apple stock now worth $295 million."
Thius could be the end of Steve Jobs.
First off, I don't see how he could cancel the awards and then subsequently cash them in to realize a gain. If they are cancelled, they aren't there to cash in.
Second, I think that I and a majority of Apple shareholders think that Steve Jobs is worth way more than all the compensation he was given in all forms including the shares, jet, etc. Apple is a clear case where the management including the CEO has added tremendous value to the company. In fact, if Steve didn't come back, there very well may not still be an Apple today.
This looks like a mistake and even if backdating did happen, backdating is only sometimes illegal. Apple being upfront about it should lessen any penalties.
To say that this could be the end of Steve Jobs is insanity. He has been through stuff 100 times worse than this and came out on top.
Originally posted by melgross
I do agree that Apple is a quality company. They are quite conservative financially. If you check their debt load, you can see that. This was likely something that was either in error, or was done by the executives privately, without informing the financial department. This just isn't an Apple type of transaction.
If only the US Government would take a lesson from Apple.