Is Apple rotten at the core?

“A while back, one of my father’s best friends told him this: ‘Major corporations are run primarily for the benefit of those in the executive suite. Don’t forget it.’ Though his position as a top-level exec at many of the world’s biggest pharmaceutical companies made him an expert on the topic, I always kind of hoped he was wrong,” Seth Jayson writes for The Motley Fool. “Yesterday, Apple proved to me, once again, that he was speaking the truth.”

“Last night, the company admitted through a statement that superstar CEO Steve Jobs ‘was aware that favorable grant dates had been selected.’ Yet, in a bizarre semantic exercise, it simultaneously concluded, ‘The investigation found no misconduct by any member of Apple’s current management team,'” Jayson writes. “Apple’s special investigation unit apparently decided that there was neither harm nor foul, because Jobs ‘did not receive or otherwise benefit from these grants and was unaware of the accounting implications.'”

Jayson writes, “What a load. Jobs began his life as a programmer. Surely he’s capable of doing the basic math that reveals the following simple truth: When you backdate (or springload) options, you hand the recipients potential monetary gains in excess of those they actually deserve. Excusing Jobs simply because he didn’t benefit personally looks like another flimsy exercise in self-serving corporate-speak. Let me see if I get this straight: It’s OK for Jobs to know about and condone (whether explicitly or through inaction) options backdating, because he didn’t see any extra greenbacks flow into his wallet?”

“Of course, Jobs is too important to answer for shenanigans under his watch, even if he was aware of them. Instead, Apple served up perhaps the world’s scrawniest sacrificial lamb. CFO Fred Anderson fell on his sword, but don’t worry — it’s only a flesh wound. He’s already the former CFO, and now he’s just resigning from the board of directors. The only consequence for Jobs so far is the need to have his name appended to a terse apology from Apple corporate,” Jayson writes.

Jayson writes, “I have no doubt that this brouhaha will fade quickly. Jobs maintains his enviable spot as the media’s darling. Personally, I’d love to see what the response would be if this statement came from some Wall Street punching bag — say, Microsoft, Home Depot, Hewlett-Packard, or — heavens to Betsy — an oil company. Gates, Ballmer, Nardelli, Hurd, or any oil exec would have been tarred and feathered before morning.”

Full article here.
Apple’s not rotten at the core. Maybe a little wormy in spots, but not rotten.

Related articles:
Analyst: Anderson, Heinen may be former Apple executives responsible for irregular options grants – October 05, 2006
Analyst: Apple restatement due to options irregularities not expected to be significant – October 04, 2006
Apple’s special committee reports findings of stock option investigation – October 04, 2006
Shareholders allege Apple execs reaped ‘millions’ in unlawful profits – August 23, 2006
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 added to Nasdaq’s list of ‘delinquent companies’ – August 18, 2006
Apple unlikely to be delisted by NASDAQ – August 16, 2006
Apple CEO Steve Jobs drawn into stock options scandal – August 15, 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
Disney: no material impact from Pixar options – August 09, 2006
Pixar options draw scrutiny – August 08, 2006
Apple stock options scandal? What scandal? – August 07, 2006
Class action lawsuit over stock options filed against Apple Computer, Inc. – August 04, 2006
Wall Street forgiving of Apple’s stock option irregularities; CEO Jobs unlikely to be terminated – August 04, 2006
Apple’s stock option irregularities escalate into a scandal as world awaits Steve Jobs’ WWDC keynote – August 04, 2006
Apple warns of profit restatement dating back to 2002 – August 04, 2006
Apple loses 3.5% to $67.15 in premarket trading – August 04, 2006
Apple announces update regarding stock option grants – August 03, 2006
Shareholder’s options suit against Apple alleges ‘striking pattern that could not have been chance’ – July 11, 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

50 Comments

  1. Funny he doesn’t condemn Dell … who withheld the fact that they were being investigated by the SEC for close to a year before revealing it to shareholders.

    I’m surprised Enderle isn’t attached to this rubbish.

  2. Boy, the “Say it ain’t so, Steve!” fanboys are out in force: “He’s mixing up Jobs with Gates!” “He’s not saying anything about Dell!” etc, etc.

    This isn’t about Dell or Gates, this is about wrongdoing at Apple, a major publicly-held corporation. Regardless of how much you like their products, or their CEO, or how cool, hip, and counterculture they are, they’re not immune to SEC regulations and should be held accountable for any financial shenanigans.

    Those of you who hold AAPL stock should be furious at the higher-ups at Apple for the potential damage they’ve caused to a company of which you are a part-owner, not defending them with spurious arguments. As shareholders, this affects YOU.

  3. @ Viridian,

    He has some obvious mistakes in his article, and he’s writing it from a very anti-Apple stance.

    Just this one line, for example:
    “Jobs began his life as a programmer”

    If he makes false statements like that, how can anything he says be taken seriously?

  4. Viridian,
    I am told that the practice was legal when it was done. Our govt. has decided that — now — it does not like it.

    Sort of the opposite direction our elected representatives take. You know, its all ok as long as they don’t get caught, and if they do get caught, well its not their fault anyway. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />
    N.

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