“An internal inquiry gives him a pass in Apple’s backdating scandal—but raises questions about whether [Apple CEO Steve Jobs] is getting special treatment,” Peter Burrows reports for BusinessWeek. “In Silicon Valley, Steve Jobs is admired for many things: his storybook resuscitation of Apple Computer, his billion-dollar-plus fortune, his rock star status as the driving force behind iconic products such as the iPod. Near the top of the list is Jobs’s famed ability to spin what admiring techies refer to as a ‘reality distortion field’ to win consumers over to the Apple view of the world.”
Burrows reports, “But will it work with government regulators? As Jobs prepares to wow the masses once again with his keynote at the annual Macworld trade show on Jan. 9, skepticism abounds among options experts, as well as techies, that the Apple chief executive is totally in the clear over his role in resetting start dates for company stock options. A report issued on Dec. 29 by a two-member special committee, composed of no less than former Vice-President Al Gore and tough-minded finance veteran Jerome B. York, “found no misconduct” by Jobs or other managers. Yet it acknowledged that he knew about some of the 6,428 option grants handed out between late 1996 and early 2003—roughly 15% of the total in that time—that were improperly dated to give employees an artificially low price.”
Burrows asks, “Is the world ready to see one of its greatest innovators sacrificed at the altar of the good-governance gods—especially when it’s not clear how he was enriched or his shareholders damaged? …The reward for shareholders: Apple’s stock price has climbed 1,025% since Jan. 1, 2001, just before the iPod era began, to a total market value of $72 billion. That’s why few expect Apple’s board to push Jobs out even if the government does move against him. Some suggest that it would hang tough with him even if criminal charges were filed by the Justice Dept., which is a remote possibility for many reasons.”
Burrows reports, “Says Harvard Business School management professor David B. Yoffie: ‘Obviously, these are inappropriate activities that anyone should be ashamed of. But it wouldn’t be in shareholders’ best interests to have Steve Jobs leave for something that happened four years ago that didn’t have a material impact on their holdings.’ …Analyst Gene Munster of Piper Jaffray estimates if Jobs were ousted, Apple’s stock would take an immediate hit of up to 20%, roughly $14 billion, and continue south as investors considered the longer-term implications.”
Burrows reports, “Says former SEC Commissioner Joseph Grundfest, a professor at Stanford Law School: ‘Steve Jobs is a national treasure, and Apple has to do everything it can to keep him actively engaged. If Martha Stewart can stay at her company, there should be no issue—even in the worst case—in designing a structure that keeps Steve Jobs at Apple.'”
Full article with much more here.
[Thanks to MacDailyNews Reader “joe architect” for the heads up.]
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