“With the iPod and the iMac, Steve Jobs has revolutionised the media world. But now a financial scandal could topple Apple’s inspirational chief executive,” Chris Ayres reports for The Times Online.
Ayres reports, “The screen went dead for a second. When it came back on, a thin, greying man in his fifties — wearing circular frameless glasses, a couple of days’ stubble, and a black cotton shirt buttoned to the collar — was talking calmly against a glowing purple and black background. He could have been a cult leader, a dictator from the 22nd century, or perhaps an alien prince, addressing Earth from another dimension. In fact, he was Steve Jobs, co-founder and chief executive officer of Apple Computer: the man who has sold the world 60 million iPods, one billion music downloads, 45 million television show downloads and more than ten million iMacs, thus changing forever the way media is consumed by the masses. He was being interviewed on CNBC, the influential financial news channel.”
“’We’re not under investigation by the SEC or anyone else,” said Jobs, referring to America’s much-feared financial regulator. ‘[But] we did start our own investigation,’ he continued. ‘We did discover some irregularities, and we’re, y’know, letting that investigation have it’s due course . . . and it’ll be completed in the not too distant future,'” Ayres reports.
“The Apple CEO’s manner was that of a doctor, gently dismissing the latest phantom symptom of a hypochondriac patient. And when the camera cut from Jobs to a reporter standing outside Apple’s latest product launch event in San Francisco — a fire engine wailing portentously in the background — it was tempting to feel reassured,” Ayres reports. “But to anyone who has followed the script of any previous corporate scandal in the United States, it was deeply unsettling. For example: how could Jobs possibly know for certain that the SEC wasn’t investigating Apple’s accounts? Especially given that the iPod manufacturer had left investors panicking in August by declaring that financial reports issued by the company since 2002 ‘should not be relied upon’ — not to mention the fact that the ‘irregularities’ of which Jobs spoke were related directly to his own remuneration package.”
“It is thought that in January 2000 Jobs was issued ten million share options by Apple, with a strike price that corresponded to the company’s lowest share price for that month. The resulting profit could have been as high as half-a-billion dollars — but Jobs never collected it. Apple mysteriously cancelled the grant in 2003 and replaced it with another,” Ayres reports. “Jobs’s case is made stronger by the fact that he never sat on Apple’s remuneration committee after becoming CEO in 1997.”
Ayres reports, “The bottom line, of course, is this: will the man who turned computers into gallery exhibits, and who revolutionised the way music is sold and consumed, end up being fired from the company he co-founded for a second time? Will he be ruined by something as idiotic as a rigged stock option, when his fortune is already valued at about $4.4 billion?”
Full article here.
This is a hit piece. From the descriptions of Jobs as a would-be “cult leader, a dictator from the 22nd century, or perhaps an alien prince” to the snidely exact and uniquely British quote of the American Jobs’ “y’know” to overblown descriptions of the “scandal’ as “deeply unsettling” with “investors panicking” (check Apple’s stock price; some “panic, huh?) right on through to describing a stockholders’ approved grant cancellation as “mysteriously cancelled.” Please see related articles below for more realistic and less sensational reports of Apple’s stock option irregularities.
How options-backdating irregularities can affect your Apple Computer stock – August 23, 2006
Apple’s options imbroglio: Mac-maker granted options at or near key events in company’s history – August 18, 2006
Apple unlikely to be delisted by NASDAQ – August 16, 2006
Apple announces update regarding stock option grants – August 11, 2006
As expected, Apple delays quarterly results due to stock-options grants review – August 11, 2006
Some stock options grant decisions were made by Apple board, and potentially, CEO Steve Jobs – August 10, 2006
Apple stock options scandal? What scandal? – August 07, 2006
Wall Street forgiving of Apple’s stock option irregularities; CEO Jobs unlikely to be terminated – August 04, 2006
Apple warns of profit restatement dating back to 2002 – August 04, 2006
Apple announces update regarding stock option grants – August 03, 2006
Apple announces update regarding stock option grants – July 05, 2006
UBS: stock options probe unlikely to hurt Apple – June 30, 2006
Apple joins growing list of companies entangled in stock option ‘irregularities’ – June 29, 2006
Apple to investigate stock option grant ‘irregularities’ made between 1997 and 2001 – June 29, 2006