Steve jobs back dating stock options
A former chief financial officer of Apple reached a settlement with the Securities and Exchange Commission yesterday over the backdating of stock options and said company founder Steve Jobs had reassured him that the questionable options had been approved by the company board. Anderson, who left Apple last year after a board investigation implicated him in improper backdating, agreed yesterday to pay .5 million to settle civil charges. Heinen, former general counsel for Apple, with violating anti-fraud laws and misleading auditors at KPMG by signing phony minutes for a board meeting that government lawyers say never occurred. He said he warned Jobs in late January 2001 that tinkering with the dates on which six top officials were awarded 4.8 million stock options could have accounting and legal disclosure implications. Ehrlich said Heinen's actions were authorized by the board, "consistent with the interests of the shareholders and consistent with the rules as she understood them." Anderson issued an unusual statement defending his reputation and tying Jobs to the scandal in the strongest terms to date.
Jobs has always maintained he was unaware of the accounting fraud involved with improper backdating of his options, and no government legal action was taken against the CEO and Apple.
No one's pay was "inflated" by backdating, unless you assume that the alternative would have been awarding executives exactly the same number of options at less-advantageous prices.
Which, of course, you shouldn't assume since any sensible employee can see that if his each stock option is worth less, he should get more of them.
It was the pseudo-scandal launched by the Wall Street Journal's investigative unit, after its reporters began following up on an academic report that demonstrated many executive stock options awards were too well-timed to be plausible.
The basic idea was that many companies seemed to award stock options on days when their stocks were at low-points, which increased the value of the options when the stock increased and made the stock cheaper to buy for the executives.