NYT Reports Steve Jobs' Exoneration

heyitsgogi writes "The New York Times is reporting that Apple has cleared Steve Jobs of any wrongdoing. From the article: 'In a filing with the Securities and Exchange Commission, Apple said that while its investigation revealed that the company's stock option procedures did not include sufficient safeguards to prevent manipulation, Mr. Jobs did not benefit financially from any questionable stock awards.' As a result of the internal investigation, Apple said it would record $84 million in expenses related to the options awards."

In other news...

Rosie ODonnell says she's not fat. Geek says that the 10 gadgets hanging out of every pocket makes him look sexy. Linus says that Linux is the best OS ever. Ballmer says the chair threw itself. Pot denys that the kettle is black.

Re:In other news...

...and HP's internal audit shows spying on its board by the chair woman was all done legally.

Re:In other news...

A North Korean Blue Ribbon Commission says that Kim Jong Il isn't a dictator and is beloved by his people.

...what the!?

""Apple is in a much more difficult position than other companies in the backdating morass, because a significant portion of its market valuation is based on Steve Jobs staying at his job," he said."

Ah, and I suppose that if Bill Gates ever left Microsoft, Microsoft's stock would be doing just fine? (Note that there was a recent story from CNet news in which Gates went out of his way to say that he wasn't quite leaving MSFT yet...)

Geez - it's not as if Steve Jobs is God or anything (zealots' assertions to the contrary, of course. IMHO the only reason Jobs' return to Apple was hailed so highly in the first place was because the people he replaced were as incompetent as Hell).

/P

Re:...what the!?

Well it is not that Jobs is irreplaceable but Jobs is heart of the company. The reason for Apples success lately was because the systems follows Jobs vision of a computer. Microsoft and Dell tend to compromise what all their customers say they want and put it in. Apple just put in what Jobs like. Hence being able to Switch OS's and Platforms without missing a beat. Democracy doesn't always come up with the best solution just one that everyone can deal with. Apple either you love it or you hate it. Apple does listen to your advice but just because a lot of people want that feature it doesn't mean they will put it in.

Re:...what the!?

Really?

Steve Jobs pulled the company back from extinction. During his reign we've seen the rise of OS X, the iMac phenomenon, the iPod juggernaut, iTunes, and other great software. The fact is the design and implementation of nearly all of Apple's products (especially the big ones) owe at least something to Jobs tweaking. Don't forget his massive performances every Macworld (less than 2 weeks, yea!).

The loss of Steve Jobs would be devastating to the company's stock, if not the company it's self.

In fact, not too long after they announced Steve Job's cancer and successful surgery last year there was an opinion piece in Forbes that made a very strong case that they were wrong not to tell the stockholders about it until after it was fixed because he was such an important part of the company that his health really mattered, compared to the financial results if the CEO of Bank of America got cancer. BoA has other capable people and could survive.

True or false, Apple is basically perceived by a great many people to be an extension of Steve of sorts. Without him there, it's not the same Apple.

Nice to see.

Apple is no Enron. Sometimes they really didn't do it.

In related news

An internal investigation by Microsoft has cleared Steve Ballmer of throwing any chairs.

Whew....

What a relief... Apple has made a press release that an internal Apple investigation found no wrongdoing by its CEO. I am sure that is worth a lot to the SEC and is in no way damage control against the investor jitters since it was leaked that the SEC was investigating...

Apple with no Jobs?

Apple may have cleared him. but the SEC hasn't. I suspect Apple is only clearing him because of the speculation, rumors, and falling stock.

The internet is buzzing [marketwatch.com] withspeculation that Steve Jobs may step down over reports that he profited $7.5 million in stock options by falsifying an executive board meeting. The financial times has a good overview of the unfolding story [ft.com].

From the Article:

"Steve Jobs, chief executive of Apple Computer, was handed 7.5m stock options in 2001 without the required authorization from the company's board of directors, according to people familiar with the matter.

Records that purported to show a full board meeting had taken place to approve Mr Jobs' remuneration, as required by Apple's procedures, were later falsified. These are now among the pieces of evidence being weighed by the Securities and Exchange Commission as it decides whether to pursue a case against the company or any individuals over the affair, according to these people."

Re:Apple with no Jobs?

...he profited $7.5 million in stock options...

How exactly did he profit from these options when he gave them back without exercising them?

Astroturf Much?

Falling stock? WTF? The only places I've seen people making a big deal out of this are posts by users on Tech sites. Meanwhile Apple stock is up nearly $4.00 today alone, and is riding at 10+ year high of over $84/share. Methinks there's some pretty heavy astroturfing going on about this. Because the facts seem to indicate that the shareholders and market in general don't give a flying fuck about this "huge" scandal. They're too busy watching Apple's continually rising sales and high profit margins to care about something as piss-insignificant as a $100 million in stock irregularities.

I mean, god damn people, this isn't ENRON or WorldCOM. Apple sure as hell isn't collapsing like a house of cards. The facts remain: Apple is making shit tonnes of money. Worst Case Scenario out of this event: Apple gets a bit of bad press nobody cares about, they pay a fairly minor fine (compared to their Billions in Cash and liquid assets) of a few hundred million plus maybe some back taxes, and maybe, MAYBE a CFO and some other financial staff get forced into early retirement. That's it. You think the board of directors (let alone the Shareholders(!)) are going to cashier Steve "Reality Distortion Field" Jobs over 10 or so million? HA! Get a fucking life!

Re:Apple with no Jobs?

You wrote:
The internet is buzzing withspeculation that Steve Jobs may step down over reports that he profited $7.5 million in stock options by falsifying an executive board meeting. The financial times has a good overview of the unfolding story.

Yet quoting from the Financial Times article you linked to

Mr Jobs later surrendered his options before they were exercised, implying that he did not gain any direct benefit from them. He was later given a grant of restricted stock by the company instead.

So where is all this internet buzz describing how Jobs 'profited' from $7.5 million in stock options that he surrendered without exercising? You might want to RTFA [nytimes.com] which has many more specifics than your links.

You further claim that Apple 'cleared him' due to speculation, rumors, and falling stock. But please explain how Apple can formally and legally exonerate Jobs without demonstrating exhaustive proof within SEC accounting rules that Jobs wasn't involved. Ie, they handed all results of their internal inquiry directly to the SEC, and if they falsified anything in there they'd be in far more trouble than they are now. And their internal investigation was quite exhaustive, with over 26,000 man hours [streetinsider.com] devoted to this issue.

Also, you'll notice in that NYT article that the focus of the blame seems to lie on two executives (Fred Anderson and Nancy Heinen) that have both subsequently quit Apple since this backdating scam and also have their own independent lawyers ready. And FWIW, I can't find the story now, but an analyst at Piper Jaffray claimed a less than 5% chance Jobs was illegally involved but that as CEO it's standard practice to retain one's own legal counsel for such a situation.

Whole Lotta Fakin' Goin' On Over Jobs' Options

Check out the documents Apple filed with the SEC Friday [sec.gov] acknowledging that a grant of 7.5M options to CEO Steve Jobs with an exercise price of $18.30 dated 10-19-2001 was actually finalized on 12-18-2001 when the share price was $21.01. Apple goes on to note that approval for the grant was 'improperly recorded' as occurring at a special Board meeting on 10-19-2001 - a special Board meeting that Apple now admits did not occur. Apple takes a page out of Mark Hurd's I-know-nothing-playbook [siliconvalley.com], insisting that 'There was no evidence, however, that any current member of management was aware of this irregularity.' Which begs the question: Don't any members of Apple management read those Proxy Statements they provide to investors and the SEC? In 2002 [sec.gov] and 2003 [sec.gov], Apple's Proxy Statements clearly stated that: 'in October 2001 the Compensation Committee recommended and the Board approved granting Mr. Jobs options to purchase 7,500,000 shares under the 1998 Plan in order to provide him with an incentive to continue to serve as the Company's CEO and maximize shareholder value.' Apple also points out in its SEC filing that Jobs did not receive or financially benefit from backdated options, apparently feeling that the 5M shares of restricted stock Jobs was given after 'voluntarily canceling' his underwater options grants in 2003 [cnn.com] shouldn't count.

"...not benefit financially"

Couldn't he have still done something illegal but not benefited financially?

Clinton and Algore trained Jobs well...

An internal investigation by the Clinton Justice Department found Algore did nothing wrong when he accepted gobs of soft money from the Bhuddist Monks at a "funraiser" due to "No Controlling Legal Authority" An Inconvenient Truth, Al?

So if Apple says that the execs aren't guilty.....

..... then that's cool right? Perhaps. But am I the only one who has a bit of an issue with no third party (and by that I mean COMPLETELY outside Apple) oversight? It's not as if they don't have an interest in this right?

In related news,

The US Securities and Exchange Commission and Department of Justice have independently terminated investigations into Apple's reportedly irregular stock option grant activities. A DoJ spokesperson was quoted as saying "A superior jurisdiction has cleared Apple and Steve Jobs of all allegations, so we obviously have no grounds to pursue."

Mr. Anderson...

It seems that you've been living two lives. One life, you're Fred D. Anderson, Chief Financial Officer for a respectable software company. You have a social security number, pay your taxes, and you... help your landlady carry out her garbage. The other life is lived in the back rooms, where you go by the hacker alias "Neo", and are guilty of virtually stock option crime we have a law for. One of these lives has a future, and one of them does not.

We're willing to wipe the slate clean, give you a fresh start. All that we're asking in return is your cooperation in bringing a known terrorist to justice.

What about their CFO, Mr. Anderson? Even if Jobs doesn't go down the tubes, high-level people like the CFO resigning can still affect a company in a major way, and it looks like Jobs is trying to distance himself from the fiasco (not that I blame anyone for wanting to do that).

Hey dad !

Of course Apple cleared Jobs of any wrong doing, who else is going to bail their ases out ?

Apple has cleared... Apple said...

I know that the law views corporations as legal persons, but isn't this taking it a bit too far?

In other words, corporate circle-jerking is OK...

Apple said that while its investigation revealed that the company's stock option procedures did not include sufficient safeguards to prevent manipulation, Mr. Jobs did not benefit financially from any questionable stock awards.

If this stands, its shitty news for anyone who holds stock. What this would essentially do is legalize corporate circle-jerking. In other words, it would be OK for top buddies to make deals that individually don't directly financially benefit the decision-maker, but such deals would be made with the mutual (oral/untraceable) understanding that the next deal by the next decision-maker would financially benefit the first decision-maker.

Enron II - here we come!

Quote

Steve Jobs was quoted today as saying, "I am proud to say that I have been exonerated by myself twice as fast as any previous corruption probe."

That Steve! Always the innovator, even when it comes to stealing from the shareholder. I'm feeling a strange sensation right now -- I think it's from the corruption-distortion field.

Did anyone else read this as...

Did anyone else read this as Steve Jobs Execution? Guess I've been looking at too many Sadam Hussein stories online today...

In other news

Saddam Huessien just cleared himself of murder charges.

Isn't this like the...

mafia clearing it's boss of any wrong doing? I'll wait for the investigation by a federal grand jury to decide if Jobs did anything indictable and judge and jury to decide his guilt.

Where did the 84 million USD come from?

The article says "As a result of the internal investigation, Apple said it would record $84 million in expenses related to the options awards.".

Is this from expenses incurred as a result of the investigation or are these expenses that were not recorded previously, but should have been?

Analysis of the forum...

Now, I can not attest to knowing anything about this ordeal, but it has been interesting to follow how the forum is handling it. I've noted that most of the posts on this forum largely fall into two catagories: flippint remarks, usually involving common cliches and tidbits from geek pop culture thrown in for good measure; and then fairly serious posts by people who actually READ THE ARTICLE, most of which exhonerate Mr. Jobs. Now, I expected quite a few posts that would attempt to clear him and settle the unrest it has caused... but I expected more in opposition by people who actually have something worthwhile to say.

What Really Matters is:

The news helped push shares of Apple up nearly 5 percent today to $84.84. Consider Apple's market cap being 70BN - that's a neat 3.5 BN in leap.

For those who won't RTFA or Google into the matter - Another piece of news says Apple acknowledges fake documents [eetimes.com]. From the article: "In the filings, Apple [apple.com] (Cupertino, Calif.) acknowledged that the company faked documentation to indicate that a grant of 7.5 million options to CEO Steve Jobs was recorded at a special meeting of the board of directors on Oct. 19, 2001"

If faking doesn't tantamount to fraud - then what does ? And if the CEO is not responsible for this - what I call as defraud - then who is ? Sure this is no Enron, but when it comes to corporate governance there's nothing like a small fraud.

AGM for year 2001.

The 7.5mm Stock award was "given" to Steve Jobs in October 2001, hence details would have been disclosed re Senior Execs remuneration in documents suppled for that yeas AGM. Now we are being told that nobody noticed that there had been no board meeting to award that amount of Shares to the CEO. The CEO didn't notice his award wasn't ratifies by a Board meeting. The CFO didn't notice The Gen Counsel didn't notice The Head of HR didn't notice The internal Audit Dept didn't notice The external Auditors in their review didn't notice. The Board members didn't notice Only 2 people appear to have left Apple. And yet nonone else in the above list noticed this "small" item?

In other news ENRON clears Lay from any wrongdoing

That about sums it up then. Nothing to see here. Move along.

Apple: "Jobs did not benefit from these options."

Maybe he didnt. Fortunately (for Jobs), the story doesn't end here.

From a more independent news source:

"Apple says Mr Jobs' option was subsequently cancelled and resulted
in no financial gain, but while the options were cancelled in 2003,
Apple granted Mr Jobs five million shares in exchange."

http://news.independent.co.uk/business/news/articl e1214598.ece [independent.co.uk]

Re:Give it back!

He already did.

Re:That ol' RDF

Yeah, did all that LSD I took put me in some alternate universe where wrong is alright?

Re:This Just In

I can't wait for Steve Jobs's new book: "If I did profit from backdating stock options, here's how I did it".

Re:NYT Credibility

Well hey, at least it isn't Fox "Mark Foley is a Democrat" News. Anyway, why would you have any reason to doubt the veracity of this report?

I'm not sure what this means

If the New York Times says it, then it must be true -- NOT!

Are you saying that the NYT is incorrect, and Apple's own internal investigation did not clear Jobs? Or are you saying that somehow the NYT is biased in favor of Apple, and made up the entire story? Or are you actually talking about something completely unrelated to Apple, Steve Jobs, and the story at hand?

We all know that just because Apple cleared Jobs that doesn't mean there wasn't some wrongdoing on his part, but the NYT is merely reporting on what Apple found. Why do you think their reporting on this is innacurate?

Re:NYT Credibility

If it wasn't for the New York Times, half of the world's blogs would be empty.

On second thought, maybe that's not such a bad thing.