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Steve Jobs was aware of backdating scandal, but cleared of wrongdoing

Apple today filed its Form 10-Q for the quarter ended July 1, 2006 and its Form 10-K for the fiscal year ended September 30, 2006 with the Securities and Exchange Commission. Both filings had been delayed pending the conclusion of an independent investigation by the special committee of the board of directors into past stock option practices and the resulting restatement of the company's financial results.

The Financial Times yesterday reported that Steve Jobs took a $7.5 million stock options reward in 2001 without the required authorization from the company’s board of directors. According the news story, Apple had a false record of a board meeting to approve the stock options, which never actually took place.

An excerpt from the report filed to the SEC gives an explanation of the matter:

The Special Committee’s investigation identified a number of grants for which grant dates were intentionally selected in order to obtain favorable exercise prices. The terms of these and certain other grants, as discussed below, were finalized after the originally assigned grant dates. The Special Committee concluded that the procedures for granting, accounting for, and reporting stock option grants did not include sufficient safeguards to prevent manipulation. Although the investigation found that CEO Steve Jobs was aware or recommended the selection of some favorable grant dates, he did not receive or financially benefit from these grants or appreciate the accounting implications. The Special Committee also found that the investigation had raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants.

Based on an analysis of the findings of the independent investigation, the Apple has recognized total additional non-cash stock-based compensation expense of $84 million after tax, including $4 million and $7 million in fiscal years 2006 and 2005, respectively. The restatement arises solely from certain stock option grants made between 1997 and 2002; the investigation found no grants after December 31, 2002 that required accounting adjustments.

Although some believe that Steve Jobs’ future at Apple is now in question, the company said in a statement that its trust in its CEO has not changed.

"The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices," in a joint statement said Al Gore, chair of the special committee, and Jerome York, chair of Apple's Audit and Finance Committee. "The board of directors is confident that the Company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team." Al Gore is also a director of Apple Computer.

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Did you know...
By JASANITY on 12/30/2006 5:43:17 PM , Rating: 2
Al Gore invented Apple. He did this right before he invented the internet...




RE: Did you know...
By ZmaxDP on 12/30/2006 10:16:18 PM , Rating: 2
He invented apple? Shoot, I thought he said he invented apples, you know, like the kind that fell on Newton's noggin...

All jokes aside, for all that this is a scandal, Apple set a very good example for the rest of corporate America in how to handle this kind of scandal. No company that large can avoid them. There's always a bad apple (pun intended) at any big company, and the entire company shouldn't get a bad rep for the acts of only a few bad employees. You punish the employees, take a temporary hit on the market, and then move on. Apple disclosed much more than they are required to about this issue, and seem to be doing a good job fixing it. Certainly the responded a lot faster as well.

Kudos, for now..


RE: Did you know...
By oTAL (blog) on 12/31/06, Rating: 0
RE: Did you know...
By TheShniz on 12/31/2006 12:26:17 AM , Rating: 1
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
That is because it must 'not [be] worth reading'...
... Al Gore ::sigh:: there's one screwed up individual, someone best forgotten


RE: Did you know...
By masher2 (blog) on 12/31/2006 11:51:58 AM , Rating: 2
You left off an important part of Vint Cerf's message. Let me repeat it here:

quote:
No one person or even small group of persons exclusively "invented" the Internet. It is the result of many years of ongoing collaboration among people in government and the university community...Our work on the Internet started in 1973 and was based on even earlier work that took place in the mid-late 1960s.
Hundreds of thousands of people were involved, and no one person can claim even 1% of the credit. Cerf himself is only called the "father" of the Internet by pop-sci newsrags who feel the need to simplify to absurdity, in the hopes of selling print.

For Al Gore to claim credit for the Internet, simply because he voted some appropriations money, is a vast disservice to both history, and the countless fine researchers who actually did contribute greatly to the effort.


RE: Did you know...
By oTAL (blog) on 1/2/2007 10:59:18 AM , Rating: 2
Did you read the part I did quote?

"We don't think, as some people have argued, that Gore intended to claim he "invented" the Internet."

He made a slip up, not a lie. Credit is due and he just worded it an easily misinterpreted way.

"Moreover, there is no question in our minds that while serving as Senator, Gore's initiatives had a significant and beneficial effect on the still-evolving Internet. The fact of the matter is that Gore was talking about and promoting the Internet long before most people were listening. We feel it is timely to offer our perspective."

It is accepted in those circles that Gore deserves credit for promoting the concept and hastening its growth. It IS indeed VERY similar to the Bill Gates 640K stuff. I'm not really sure anymore but I seem to recall someone with knowledge on the matter quoting him with something like "640K ought to be enough for everybody". That sentence was used in a particular context and made perfect sense at the time, but as Al Gore's statement it was distorted to mean something it did not.

The main question is: Do you think he was trying to take credit for the invention of the Internet?
Any sane person will know he wasn't. He was doing what every other politician does. He was summing up his most important choices and actions that have had a positive impact on Americans in particular and the world in general. Although it may not be elegant to rave about all the great things you have done in the past, it is hard not to do it on some situations so I don't blame him for that.

As for the suggestion that I am associated with Al Gore or the Democratic party... please!! That sounds like the answer Sony fan boys give when one bashes the PS3... I'm Portuguese, I live in Europe, I have never and will never vote on a U.S. election. I just hate it when people bash someone for a distorted slip up instead of giving them credit for the important actions that person may have taken (and in this case they are directly connected). Keep on downrating and I'll keep on defending him about this matter... Maybe a few uninformed people will read it and be willing to search Google, and stop taking these "quotes" for granted.

No matter what my political beliefs may be, I'm standing up for what I believe is justice, instead of spreading disinformation on the internet... I may be a needle in a thousand haystacks on the internet, but at least I wanna make my needle a good one and not a sheepish, follow the masses, ignorant one.


RE: Did you know...
By masher2 (blog) on 1/2/2007 12:21:46 PM , Rating: 2
> "He made a slip up, not a lie..."

He vastly exaggerrated his own contribution. It certainly wasn't a "slip up", and it merely continued his long-standing tradition of inflating his actions beyond all pretense of reality.


RE: Did you know...
By oTAL (blog) on 1/5/2007 1:55:33 PM , Rating: 2
quote:
He vastly exaggerrated his own contribution. It certainly wasn't a "slip up", and it merely continued his long-standing tradition of inflating his actions beyond all pretense of reality.


That, I am in no position to argue since, as I mentioned, I am not American and I don't closely follow the smaller issues in your country. That means I have to take your word for it.
On the other hand, you should be able to admit that anyone who quotes Al Gore as saying "I invented the internet" is a sheepish numbnut and should be corrected (or disregarded).


RE: Did you know...
By oTAL (blog) on 1/5/2007 2:31:23 PM , Rating: 2
One interesting thing on our little discussion here is that we are both presenting our arguments constructively (unlike some other people who replied to the thread) and, given the choice, I'd uprate your comments although I may not agree with them. Yet, I always get slammed for actively and coherently displaying my opinion when it goes against the masses. Still, when my opinion follows the masses I feel less need to express it (which, when it happens, usually gives me high ratings).
I guess that means follow the herd types, with a knack for quick witty jokes, get the high ratings around here....


RE: Did you know...
By SilthDraeth on 1/1/2007 9:28:40 PM , Rating: 1
You must be an Al Gore PR Rep.


RE: Did you know...
By FredEx on 1/2/2007 4:31:15 AM , Rating: 2
Sort of like the, "640K is enough" statement and the myriad of variations of the statement Bill Gates supposedly said in 1981. He never said it. I've read that he said it in 1981, but nobody has ever been able to provide a citation or transcript of anything even close to that having ever been said by him. The challenge has been laid down for somebody to provide proof he made such a statement and nobody can provide proof since it never happened. Gates himself says he never made the statement.

I'll get to an article or site where people or a person will rant and rave about him, they using that quote, and right away they lose me since in my opinion it shows greatly that anything they have to say is suspect. If they can't get fact that he never made the statement right, how can I put any worth in anything else they say? I just can't.

Same goes when I see somebody go off on Gore inventing the internet. Anything else they have to say in my opinion then has little or no value.


RE: Did you know...
By Fanon on 1/2/2007 10:03:33 AM , Rating: 2
"I took the initiative in creating the Internet."

The difference between what you say about the "640K is enough" statement and the "I invented it" statement is that you can find several citations AND sound clips of the latter. Yes it exists. Yes he said it. Move along.


to me, its Kharma
By retrospooty on 12/30/2006 12:58:55 PM , Rating: 2
Steve Jobs deliberately lies and cheats to get what he wants (up until now we only knew about the exaggerated performance claims and falsified benchmarks), and now it bites him in the arse. =)




RE: to me, its Kharma
By TheShniz on 12/30/2006 1:18:57 PM , Rating: 2
Where exactly are you citing these quotes from? There is no mention of Al Gore or the last quote mentioned in the reference. Come on Marcus, editing should come BEFORE publishing.


RE: to me, its Kharma
By KristopherKubicki (blog) on 12/30/2006 1:31:36 PM , Rating: 1
It's from the Apple press release on the matter. I added a link:
http://www.apple.com/pr/library/2006/dec/29_10q_10...


RE: to me, its Kharma
By masher2 (blog) on 12/30/2006 1:46:45 PM , Rating: 2
Yes...and Al Gore chaired Apple's special committe which granted these options, and 'investigated' after the resultant scandal. That's something you won't see reported on CNN either.


RE: to me, its Kharma
By nurbsenvi on 12/30/2006 1:57:05 PM , Rating: 2
Steve Jobs is a show host he puts up a good show for the industry

I hate him


In Plane English Plz
By Nehemoth on 12/30/2006 4:24:17 PM , Rating: 2
Can somebody please explain this in plane English what all these things mean??

Regards




RE: In Plane English Plz
By masher2 (blog) on 12/30/2006 4:28:48 PM , Rating: 2
A stock option is granting so