Baseball Crank
Covering the Front and Back Pages of the Newspaper
January 10, 2007
BUSINESS: Shiny Apple

A random thought about two stories about Apple. Yesterday's much-ballyhooed introduction of the iPhone made me think back to the recent stories about Apple's board (including Al Gore) deciding to give Steve Jobs a pass on allegations that he was involved in improper awards of backdated stock options, a hot topic du jour in the high-tech business. Now, I haven't followed the Apple investigation that closely, so I have no idea if there was anything worth complaining about in Jobs' management or in his own compensation. But it makes all the business sense in the world for Apple's Board to decide not to throw the founder, guiding spirit and public face of the company under the bus on the eve of rolling out a major new product.

Posted by Baseball Crank at 9:14 AM | Business • | Business | Comments (3) | TrackBack (0)
Comments

Crank, Apple's board was never going to toss Jobs. The question is will the Feds accept the Board's conclusion. They did toss at least one lawyer, a woman whose name escapes me. Why she would commit a crime that would benefit others is an interesting question. This can still get ugly fast for Jobs and the company.

Posted by: ane at January 10, 2007 11:46 AM

The WSJ reports that federal authorities are actively investigating a backdated stock-option grant awarded to Steve Jobs, Apple’s (AAPL) CEO, that carried a false Oct’01 date, ppl familiar with the matter say. Apple recently disclosed that records were "improperly" created to claim that the grant was approved at a special board meeting that month. But no board meeting took place then. Investigators are now focusing on the grant to Mr. Jobs for 7.5m options that were finalized in Dec’01, when Apple's share price was higher. The false dating increased the value of the grant to Mr. Jobs, and resulted in a retroactive $20m charge to Apple's earnings when it was discovered by a special internal investigation. The false documentation was created by an Apple attorney named Wendy Howell, whom the co quietly dismissed last month. Ms. Howell contends that Apple's general counsel at the time, Nancy Heinen, instructed her to create the false documentation. Thomas Carlucci, Ms. Howell's attorney, said that while at Apple "Ms. Howell acted as instructed by Apple mgmt and with the co's best interest being paramount."

http://online.wsj.com/article/SB116856838800274709.html?mod=home_whats_news_us

http://online.wsj.com/article/the_morning_brief.html

So far from over. And I think they are set for a fall. As Herb Greenberg noted on his website, the corporate culture seems off. They do as they want, when they want. His comment is based on their appropriating the Iphone with out reaching agreement with CSCO, the rights holder. Link: http://blogs.marketwatch.com/greenberg/2007/01/will_apples_arr.html

That said, I agree with your initial comment. The Apple board would not be acting in the best interests of shareholders by ditching Jobs, at this point. But the coverup is the killer, and if the internal investigation was flawed this gets brutal.

Posted by: abe at January 12, 2007 7:32 AM

Barron's blog has an update, including a link to a news report that the federal criminal investigation has begun. More interesting, check the commenter, a real blast from the past. And yes, it's the real deal. He frequently posts comments at various financial sites. http://blogs.barrons.com/techtraderdaily/2007/01/15/apple-report-us-attorney-starts-criminal-probe-of-options-grants-including-award-to-jobs/

Posted by: abe at January 15, 2007 9:13 PM
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