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The SEC Is Getting Closer To Jobs
Strudelkugel writes "CNN is reporting that Apple's ex-CFO warned Steve Jobs about backdating options. From the article: 'Apple's former finance chief Fred Anderson blamed Apple CEO Steve Jobs for a 2001 stock option grant that was backdated, according to a statement from Anderson's lawyer released Tuesday. The statement was released by Anderson's lawyer, Jerome Roth, after Anderson settled with the Securities and Exchange Commission related to Apple's stock option plan without admitting or denying any wrongdoing.' This is serious business. It is quite possible that the SEC could someday require Jobs to resign from Apple."
Jobs probably won't be forced to quit by the SEC. From today's WSJ coverage:
"The SEC said it will not pursue any further action against Apple itself, which cooperated fully with the probe"
One might argue that he is overpaid
His salary is $1 per year... I don't think anyone is going to argue he is overpaid
Homme petit d'homme petit, s'attend, n'avale
Right. Here's the ONLY thing Steve Jobs should be saying to Federal Investigators:
I think a few people might...
His current salary at Apple officially remains US$1 per year, although he has traditionally been the recipient of a number of lucrative "executive gifts" from the board, including a US$46 million jet in 1999 and just under 30 million shares of restricted stock in 2000-2002. As such, Jobs is well compensated for his efforts at Apple despite the nominal one-dollar salary. This approach reduces his personal tax liability because, under current U.S. tax law, salary income is taxed at a significantly higher rate (currently up to 35%) than the capital gains tax (currently a maximum of 15%) applied to profits arising from the sale of stock grants. Obtaining remuneration through stock instead of salary is a common extrinsic rewarding technique which ties management performance to financial benefits. Furthermore, it acts as a tax minimization strategy.
https://www.eff.org/https-everywhere
The funny thing about the Stuart case is she COULDN'T have been charged with insider trading since she doesn't fit the definition of an insider (in the company she had traded in), only her friend could have been harmed. It was her lying and instructing others to lie that got her in trouble.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
The U.S. Securities and Exchange Commission made the following announcement today:
SEC Charges Former Apple General Counsel for Illegal Stock Option Backdating
http://sec.gov/news/press/2007/2007-70.htm
CNN is not reporting the whole story.
Yes, Fred Anderson's lawyer did claim that he had warned Job's about the issue in 2001, and implied that Job's had misled Anderson.
However, in a press release today, the SEC made several statements that flatly contradict the CNN story.
The SEC said it isn't bringing enforcement action against Apple "based in part on its swift, extensive, and extraordinary cooperation in the commission's investigation."
They also stated that, "Apple's cooperation consisted of, among other things, prompt self-reporting, an independent internal investigation, the sharing of the results of that investigation with the government, and the implementation of new controls designed to prevent the recurrence of fraudulent conduct."
In short, the SEC stance appears to be that Anderson and Apple's former general counsel Nancy Heinen had the direct responsibility to review the board's decisions in this matter and make sure that Apple complied with reporting requirements. The SEC publicly stated that they are not bringing any action against Apple, they have settled with Anderson already, and will continue prosecuting Heinen (since she has chosen to fight the charges against her.
This is poor reporting on CNNs part, not a real story.
"The SEC Is Getting Closer To Jobs"
Oh, really? SEC won't file stock options case against Apple; cites company's 'extraordinary' cooperation
Sorry, Apple-haters.
That not quite true. The options were converted to restricted Apple stock for the same value as the options were currently worth. If the options had been granted later, presumably he would have been given a lot less restricted stock than he otherwise was. The Washington Post had an article about it on January 11th.
So you're correct that he never exercised the options, but he gained in a big way when they were converted to a restricted stock grant of their approximate value.
Now, landing thrusters.. landing thrusters, hmm. Now if I were a landing thruster, which one of these would I be?
The story has more info and content than the CNN acticle.
As background: I'm a forensic accountant, do large financial investigations of public companies, and am currently doing a stock option investigation. I do not have any inside knowledge of the issues at Apple.
In fact, it isn't at all possible that the SEC could require Jobs to resign from Apple.
Not true at all. The SEC has fairly broad powers to permanently ban a person from serving as director or officer of a public registrant.
Section 10(b) of the 1934 Act. See: http://www.nysscpa.org/cpajournal/2003/0303/featur es/f031803.htm
I'm free to take questions!
Fun trivia about the Jones case: Judge Susan Weber Wright was a law student of Bill Clinton's at the University of Arkansas. While teaching her Admiralty Law class he lost several student's final exams, including hers. He gave them the choice of retaking the exam or getting a B, which I think is ridiculous. He should have just given them As. She took the B and was justifiably unhappy about it. I think she filed a grievance with the university. Still, she saw her way clear issuing a summary judgement in his favor when she found the Jones case to be without legal merit.
It is cowardly, and a betrayal of whatever it means to be a Jew, to act as a white man
-James Baldwin
I recall the same. However, he was named the interim CEO in 1997, and the "interim" was dropped in 2000.
Currently, Jobs is the CEO and a (non-Chairman) Director of Apple, Inc.