Apple Computer gave Chief Executive Steve Jobs 7.5 million stock options in 2001 without the required authorization of the company’s board, the Financial Times reported on Thursday. Records purporting to show that a full board meeting had taken place to approve the remuneration, as required by Apple’s procedures, were later falsified, the Financial Times reported, citing people familiar with the matter. The report comes after Apple shares fell as much as 6 percent on Wednesday on a report in legal trade publication The Recorder that federal prosecutors were looking at ‘apparently falsified’ stock option documents in their probe of Apple’s previous grants. Update: Apple released new information about its allocation of stock options on Friday, defending CEO Steve Jobs following speculation that a key document had been forged.
Paper: Apple Board Did Not Approve CEO Options Grant
About The Author
Follow me on Twitter @thomholwerda
2006-12-29 1:26 amtomcat
He’ll be popular in jail. Some say that he has a pretty mouth… ;-p
2006-12-29 7:46 pmlibray
If there is an ultra rush to justice, he might end up in prison in time to get a Super Bowl commercial spot. Steve can then reveal iPrison, a CU-SEE-ME remake.
The stripped ipod sounds like a winner. Another ipod idea is one that looks like a normal ipod, but does not like to play AAC anymore and does not like to talk about why.
Edited 2006-12-29 19:54
Jobs will never see prison, it will come out that “he had no knowledge” of the falsified documents (yeah right!) so some poor sap will end up taking the prison term for him.
2006-12-28 11:48 pmchartster
We are almost getting ahead of ourselves here: is it really likely that some corporate high flyer will actually ever go to prison without going to Enron-esque extremes? Don’t think so!
2006-12-29 12:54 ammelkor
Yup. One law for the politicians and the rich and powerful (including corporations), and one law for the rest of us. Sounds like a fair and equitable judicial system to me.
2006-12-29 1:25 amtomcat
Yeah, it’s a pretty stark contrast between some poor slob who gets 5-10 years for holding up a gas station (and possibly getting $50) — and a white collar criminal who gets away with millions and serves no time at all. Somebody’s values are totally out of whack.
2006-12-29 4:06 ammelkor
That’s a very good comment. Deserves a mod point. 1984 anyone?
2006-12-29 6:09 amzbrimhall
Not that I disagree with your point, but consider that, in this particular case, no one’s life or livelihood was seriously endangered, whereas in the gas station example, someone was likely threatened with violence, and someone really could have gotten hurt. It’s not *always* about strict monetary loss.
2006-12-29 10:47 amRayz
I agree with your point about the loss of life.
But Apple shares most certainly form part of someone’s income, life savings or pension. So, yes, someone’s livelihood could be threatened.
2006-12-29 8:55 pmzbrimhall
I would agree to your point about shareholder vulnerability, but in this case the financial discrepency is relatively small. It looks like Apple is now reporting $84 million in previouly un-stated expenses. Shame on Apple for its bad accounting, but that kind of money is nowhere near enough to put a dent in Apple’s ability to do business.
2006-12-29 2:16 amronaldst
They’re reading into our brains, man!
2006-12-29 7:36 ammipeligro
It’s the same law for everyone: The best justice money can buy.
Or as one public defender I know puts it: the rich get richer and the poor get prison.
2006-12-29 4:00 pmsiebharinn
Or as one public defender I know puts it: the rich get richer and the poor get prison.
Well, if you think about it though, it makes sense. The rich can afford better lawyers, who do a better job of defending their clients. Lawyers are like any other profession, in that there are tiers of ability. Anyone who lowballs their legal representation shouldn’t be suprised if they end up in prison.
2006-12-30 2:21 amGooberslot
But shouldn’t the system be about justice and not which lawyer can lie the best.
2006-12-29 3:06 amMollyC
Martha Stewart saw jail time for a relatively minor offense, so it’s not impossible for the rich to go to prison without going to Enron-esque extremes. (I’m not making any comparisons to the Apple case as I’ve not followed it closely enough.)
2006-12-29 3:29 amjayson.knight
If we could all be so lucky to get stuck in the “prison” she had to go to.
And house arrest in her big ass mansion to boot. Yeah, that musta been real tough.
2006-12-29 3:36 pmbrewmastre
“Martha Stewart saw jail time for a relatively minor offense, so it’s not impossible for the rich to go to prison without going to Enron-esque extremes. (I’m not making any comparisons to the Apple case as I’ve not followed it closely enough.)”
Yeah, but Jobs is leading a company that is doing amazing things…Martha Stewart is just making macaroni art. I think we can live with her in prison for a while.
2006-12-29 9:50 pmWintermute
What is Jobs doing that is changing the world?
Get your priorities right, Apple is a design + marketing company, not a technology company. And thats ignoring the possibility that computing is not that big of a deal.
2007-01-02 12:31 pmbrewmastre
“What is Jobs doing that is changing the world?
Get your priorities right, Apple is a design + marketing company, not a technology company. And thats ignoring the possibility that computing is not that big of a deal.”
Computing is a big deal, it defines the way that we live our lives. It’s hard to believe that anybody who would be posting comments on OSNews would not think so. And Apple is a technology company. Some of the more signicant technologies that we use today would not be possible without Apple, eg. PowerPC, Firewire/DV, Newton, iTunes, iPod, etc etc. The list goes on. Thanks to the Apple/IBM/Motorola(AIM Alliance) we now have PowerPC’s controlling everything from Satellites and space rovers to game consoles to car electronics. There are something like 60 PPC’s chips controlling the new higher-end BMW’s. I know that Jobs was gone from Apple for something like 12 years, but without him, there would never have been an Apple. So please don’t tell me that Jobs is not changing the world.
2006-12-29 12:16 pmtitan1
According to the article he revoked it?
So nobody profited from it?
What’s the big deal?
2006-12-29 1:45 pmcrashfive
When did he revoke it? The article I read this morning states that after the stock option was granted, later jobs revoked it and did not profit. Was this after the probe started 3 months ago and it looked like he and the company were going to see problems? If that is the case then that is the same as robbing a bank and once investigators are on to you, you give the money back and all is ok. No a crime was still committed. Here is the latest article I found.
2006-12-29 6:12 pmMollyC
“According to the article he revoked it?
So nobody profited from it?
What’s the big deal?”
The “revoking” could be seen as admission by Jobs that he knew that things were not kosher within his company. But it’s also being said that the stock grant Jobs received in exchange for the tainted stock options are themselves tainted.
From AppleInsider.com’s 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.
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.”
So giving back the tainted options in exchange for the grants might not put Jobs in the clear. In fact, exchanging the bad options for bad grants could be akin to money laundering.
Edited 2006-12-29 18:16
And to think that the real enemy came from within the organization — most notably, Steve Jobs himself. I have owned Macs since late ’99, but man, I don’t know…
It’s WAY too early to make a judgement about this case. We know almost nothing. Certainly worth watching, but Jobs hasn’t been accused of anything yet.
So when did the new evil apple logo appear?
Anyway, this doesn’t sound very good. I hope they get to the bottom of this. Steve always made those pretenses that he only “made” $1 / year with his salary. I like Apple products, but I hope they get nailed if they start screwing around with their investors. There’s a reason why things like this need to be approved by the board!
is to be wrongly accused of something, and have some of the osnews crowd as the jurors!!
Nobody has been charged and already they are swinging on the end of a rope…..
2006-12-29 1:53 pmsuryad
No kidding! I just read an article at CNN that said that no one is to blame! Though I am still a bit iffy on that simply because the investigation conducted was an internal one…and ahem…post Enron I am ready to believe in the bad side of humanity much mre willingly than the good, innocent side. I am sure there is some kind of a smell…but whether it is a very strong one or a whiff…that remains to be seen and probably we would never find out.
What a pity if this is his legacy. Sometimes what people think is what they remember even if it is not the truth.
Came on guys!! What is going to happen? NOTHING. But not because Steve Jobs is rich.
It will happen nothing because STEVE JOBS is the most valuable thing Apple has in the whole company!!!
Steve is the guy who saves all Apple users from mediocrity. While he is there, something cool will come every few monthes.
That is so important for apple that 7 milions more or less are ridiculous if you compare it with the possibility of loosing their Lider.
Mac is GAINING MARKETSHARE!!! At a good rate!!! And with iTunes and iPods Apple is stronger that ever.
Do you really thing that that stupid minor stock options point is going to make Apple strumble?
Would you fire Bill Gates because he had not reglamentary stock options? That’s bullshit.
Another thing is if you’ll fire Ballmer for it. Ballmer is not so important for Microsoft operability. And he clearly damages its image.
“No you can’t fool the children of the revolution…”
Just saw this at digg.
Quoting digg’s summary:
Steve Jobs and Apple Execs Cleared of any Wrongdoing
An internal investigation at Apple has cleared Steve Jobs and other Apple execs of any misconduct regarding stock-option grants. News has sent the stock up 4% in pre-market trading.
Edited 2006-12-29 18:24
2006-12-29 8:19 pmojuice
Hey great, Apple says Apple didn’t do anything wrong. Let’s just take their word for it.
2006-12-29 9:03 pmzbrimhall
It’s good enough for thems that matter. From the article:
“Apple shares rose about 5 percent to $84.91 in morning trading on the Nasdaq Stock Market after the news.”
man…. this whole thing is a joke!!!!!! this “scandle” is so blown out of perportion! i mean… all this really is, is a paper work error. more akin to incompetence rather then fraud. all you people talking about Steve Jobs going to jail is just SILLY….NON of you have any clue what you are talking about and what the real situation is! let Apple and the SEC work though this dog and pony show!
there are just to many anti-apple/mac people out there HOPING that there will be a some sort of dealth kneel for apple so you can feel confident about your choice in OSs (or lack there of)
move along… there’s nothing to see here… move along… move along!
2006-12-30 8:48 amalcibiades
“The company admitted that it had falsified records to show that a board meeting on October 19, 2001, had approved the awarding of 7.5 million stock options to Mr Jobs. In fact, no meeting took place on that day and the records were fabricated, the company said.”
The Times, London, today.
Nothing to see?
To be exact, up to 84.80 right now.
1 billion dollar if I could.
He brought a deceased company to the front of all newspapers and media and made Apple what it is now around 70 billion + worth company.
I sometimes don’t know how people think negatively to hurt themselves just to follow some unapplicable laws.
2006-12-29 9:12 pmzbrimhall
I don’t think his value to the company excuses misleading accounting practices. It’s true that in this case, the damage was minimal: a *mere* $84 million is going on the books as previusly un-stated expenses. No big deal. But what if that number had been $8.4 billion? At that point, Apple’s ability to do business would be seriouly in question. Investors would suffer, and any employee whose retirement depended on the company’s stock purchase plan would be out in the street.
Now, it *looks* like Jobs didn’t have anything to do with this mess. But part of the reason this story has gotten so much traction is that it has forced people to consider at what point Jobs would have to resign, and where that would leave Apple. It tickles the imagination, no?
just testing a browser bug. sorry for the interruption.
2006-12-30 1:05 amomniwebtest
still testing. apologies!
This has a little ways to run yet. An internal investigation cleared Jobs. We have now to find out if the Justice Department or the SEC have any issues.
It doesn’t matter if he gained personally, if he did well for Apple, if Apple is doing well, if shareholders lost or won or what the stock did yesterday. All that will matter to Justice and SEC will be if there is a case. If there is, they will go after Apple.
It has nothing to do either with anti Apple or anti Mac feeling on the part of individuals. Its just about whether there is a case to prosecute. The same, by the way, will apply to the Dell case.
Well, it’s not only software that need to be de-bugged.
Looking for bugs:
Apple said its investigative team reviewed the facts and circumstances surrounding stock option grants made on 259 dates, in which team members “spent over 26,500 person-hours searching more than one million physical and electronic documents and interviewing more than 40 current and former directors, officers, employees, and advisors.”
– 259 dates
– 26,500 person-hours
– more than one million physical and electronic documents
– interviewing more than 40 current and former directors, officers
– debugging physical papers :/
Output: a few pages
Loosers: Apple and R & S = i.e. you > Mr & Mrs Tax Payer
Somehow the American corporate executives acquire the right to write themselves blank cheques. I hear that Jobs’ other company – Pixar – is also under investigation. The man is no saint as some Apple wallahs would have you believe.
Well, we’ll know everything for sure tommorow, when Apple files their forms.
Does this mean that Steve Jobs will have to give his next product release presentation from prison? Will they let him wear his usual black turtleneck or will he have to don a prison jumpsuit? Well, he’ll probably get sent to some cushy white-collar prison, so they’ll probably still let him wear the turtleneck.
Don’t know if Bono will be attending the next one to help Jobs’ unveil a new custom ipod. It would be cool if they came out with a black+white striped prison-jumpsuit-themed ipod in addition to the U2 ipod and the others.