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...

[I'm just joshin (633449)]

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...

[CaymanIslandCarpedie (868408)]

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

Re:In other news...

[udderly (890305)]

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

Nice to see.

[sgt.greywar (1039430)]

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

Let's get this straight.

[argent (18001)]

OK, let's get this straight.

Apple does an internal investigation, finds a problem, reports itself, and you're comparing this with Enron [lehenbauer.com] because they also say Steve Jobs didn't benefit from it?

I guess someone's activated an even more powerful reality distortion field than Steve's.

Re:

[Omestes (471991)]

Okay... he was implicated by an in house audit, AND reported it. Later (after reporting it) it they find that he is innocent. If this was corporate wrong doing, then why would they report it in the first place, AND THEN do responsible action and admit a mistake, and try to fix it?

Yes, corporations can do evil things, and DO evil things. But that does not make everything evil, mistakes still happen, misdirected allegations still happen, just like in real life. Corporations are not intrinsically bad, and

In related news

[dmuth (14143)]

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

Whew....

[Keebler71 (520908)]

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?

[CDPatten (907182)]

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 autho

Re:

[drinkypoo (153816)]

The article still doesn't indicate any wrongdoing on the part of Jobs. It does suggest that apple fucked up someplace. It also kind of suggests that Jobs was involved, since he was the recipient of the options... But it doesn't say so.

Re:Apple with no Jobs?

[One Louder (595430)]

...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?

[Cadallin (863437)]

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?

[wass (72082)]

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

[theodp (442580)]

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.

Re:

[donutello (88309)]

It's worse than that. Here's what Morningstar had to say about this:

We have historically not agreed with Apple's "no harm, no foul" treatment of its shareholders when it comes to option issuance, pricing, and follow-on dilution. We are especially cautious about the spin that this CEO grant was simply canceled. A careful read of the situation reveals two CEO grants under review, representing 17.5 millions options with strikes in the $18-$30-plus range, were nearly worthless in March 2003 when they were cance

Re:

[SETIGuy (33768)]

I don't see any possible motive for Jobs to do this other than to see just how well the Reality Distortion Field(tm) works.

I don't think you understand how the billionaire mind works. They don't think of much of motivation when dealing with such trivial amounts of money. When you find a quarter in the vending machine change slot, how much effort do you exert to find the proper owner. What were your motivations in putting it in your pocket?

I'm sure Steve feels the same way. He had a bunch of worthl

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

[8127972 (73495)]

..... 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?

Analysis of the forum...

[7Prime (871679)]

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.

Re:...what the!?

[jellomizer (103300)]

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:

[Penguinisto (415985)]

I don't disagree at all that a person (or group of people, e.g. Mssrs Hewlett and Packard) can be the source of vision and be the very heart of a company. My assertion is that somehow the writer thinks that Apple would collapse into some sort of corporate supermassive black hole 5 minutes after Jobs cleaned out his desk and left the offices at Cupertino.

Seriously - Intel didn't implode when Andy Grove left. GE seems to be holding up okay minus Jack Welch... and both of them were HUGE driving forces in whe

Re:

[pestilence669 (823950)]

Getting rid of incompetent management is harder than it sounds. That takes skill & balls. I've read a lot about Jobs' management style. Most CEOs don't seem to be as hands on. He seems to have a no compromise "my way or the highway" approach. I think his value is in his micromanagement.

Re:...what the!?

[MBCook (132727)]

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.

Re:

[locokamil (850008)]

Judging by the amount of chaos, unhappiness and general unpleasantness in the world, I submit that Hell is actually pretty efficient...

Re:

[Reverberant (303566)]

Jobs is not poor, yet he does very little as a philanthropist short of giving Apple computer discounts to schools to get more market share.

We've been through this before... Jobs may not have made any public announcements about his philanthropy, but that doesn't mean that he's not donating time and/or money to worthy causes. In other words, the only people who know how much (or how little) Jobs gives away is Jobs himself and his accountant.

I'm not trying to excuse any lack of philanthropy - if Jobs is

philanthropy

[falconwolf (725481)]

The sad part is so many people put him above reproach and the good guy in contrast to Gates in the great computer wars. Yet in comparing personal lives, Gates gives away more money than Jobs makes, and Jobs is not poor, yet he does very little as a philanthropist short of giving Apple computer discounts to schools to get more market share.

I guess you haven't heard how Jobs has worked with Bono and is working on AIDS amoung other things. Yea you could talk about how Gates gives away more than Jobs makes