WSJ: Steve Jobs, backdating miscreant

“The markets have finally had their say about the wonderfully overblown backdating scandal. When Apple filed its latest mea culpa on Friday along with a board expression of confidence in Steve Jobs’s leadership, the company’s shares jumped four bucks. Message: The market doesn’t give a hoot about backdating. It gives a hoot whether Mr. Jobs might be run out of his job,” Holman W. Jenkins, Jr. writes for The Wall Street Journal.

Jenkins, Jr. writes, “This ought to cast a light on whether the drop in market prices of companies in the backdating scandal reflects the shock and horror of investors at the details of backdating — or shock and horror at the meal that trial lawyers, prosecutors and the media are making of companies caught up in this episode.”

Jenkins, Jr. writes, “Backdating, let’s recall, was simply an artifice to allow companies to issue ‘in the money’ options (the terms of which were accurately reported to shareholders) without taking an accounting expense. That’s all backdating is. Does it matter in the teensiest whether options are expensed? No, expensing has no probative value whatsoever for evaluating a company’s shares or its compensation policies. Expensing creates a junk number, of zero analytical value.”

Full article “A Typical Miscreant-II” (subscription required) here.

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25 Comments

  1. With shares dropping again today, one wonders what fools are selling AAPL. No, I suppose one doesn’t wonder. Are there analysts recommending Sell? Seems like the buying opportunity continues. This backdating issue just doesn’t bother most people who know Apple. Whether SJ stays or goes does.

  2. Why does the WSJ have such a hard on for Steve Jobs ??

    Look at the news today….a really bad CEO (Home Depot’s Nardelli)is forced out for poor performance with a $200+ million severence payment and they don’t say boo.

    Isn’t obscene CEO comp the real issue here ?

    And isn’t it the absurd employment contracts the topic that should be openly analyzed ?

    The options backdating is becoming a witchhunt now.

  3. It seems that people are commenting without reading the original article (which was actually an editorial).

    The Journal doe not “have a hard on for Steve Jobs”, and the editorial did not say anything bad about Steve or Apple. It was pointing out how irrelevant the backdating issue is, and more importantly, how it is being driven by a media that gets attention by writing stories that cater to the general population’s resentment of highly paid corporate execs.

    They writiers go out of their way to point out how absurd it is that Steve Jobs would do something illegal to enrich himself by a small percentage of his actual net worth. They also mention how the shareholders value him (and other execs) by the impact these matters have on stock price.

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