Apple corporation stock option backdating scandal
But the document provides the first detailed account of the incident from Steve Jobs himself in his own words. I was very concerned that Pixar was a newly public company with shareholders, employees, and I felt that – – to my knowledge there had never been a CEO of two public companies before. What comes through in the deposition is how Jobs sees himself and his’ fierce loyalty to those who work for him. So I felt if I took the job, the Pixar shareholders and employees would think I was abandoning them.
But the resulting investigation saw Apple's former financial chief Fred Anderson and ex-general counsel Nancy Heinen forced to settle with the SEC for a few million dollars apiece without admitting wrongdoing.It’s a nice bonus if the company has increased in value.(who broke the backdating story), Jobs was awarded 7.5 million shares approved at Apple’s August 29, 2001, board meeting. However, because Jobs continued to argue over the point at which they would vest, Apple missed the deadlines it needed to file the right information with the Securities and Exchange Commssion and its auditors.The deposition was never made public until Forbes published it on Friday, after obtaining it through a Freedom of Information Act request. (Full deposition embedded below) Jobs explains his reasoning for why he asked the board for mega grants of options for both himself and his top executives, but claims ignorance of the mechanics of how that was done after the board approved the grants themselves. Backdating was then carried out to give Jobs a lower share price which, on paper, made him $20 million richer. Ultimately, it seems that Jobs swapped these options for restricted stock of lesser value.
Today’s “Today in Apple history” is significant, though, because it was one of the big scandals which rocked Apple during its big climb back to the top in the mid-2000s. In the aftermath, Apple spokesman Steve Dowling said: “Following an exhaustive independent investigation, the special committee found no misconduct by Steve Jobs or any other current management.
(It was the falsifying of board minutes for a meeting that never occurred, not the backdating per se, that got Apple’s former general counsel Nancy Heinen into hot water with the SEC—this deposition was for a case against her).
There aren’t too many revelations on the legal front in the document. So I took the title of interim CEO and agreed to come back for 90 days to help recruit a full-time CEO.
He was also feeling pretty stung that Apple's board never approached him with a stock option reward without his prompting.
The SEC claimed Heinen fraudulently cooked up options grants by misrepresenting the true dates the grants were awarded to times when the price was at a historic low.
It took until December that year until terms were finally agreed upon, at which point Apple’s stock price was $21.01.