Report: Apple's Jobs maintained stock-option ignorance
Apple CEO Steve Jobs told the SEC in a 2008 deposition that he had no idea Apple lawyers had falsified documents nor did he understand the accounting implications of backdating.
Apple CEO Steve Jobs maintained that he was unaware of the accounting implications of stock-option backdating during his deposition last year with the Securities and Exchange Commission, according to a transcript of the interview.
Forbes managed to obtain the document after a Freedom of Information Act ruling in its favor, and has published a story examining the transcript. Apple and Jobs were the subject of an investigation after the company determined that two stock-option awards given to Jobs and other Apple executives were improperly backdated, and that minutes of a meeting were falsified by Nancy Heinen, Apple's general counsel at the time.
No action was ever taken against Jobs or Apple, but Heinen and former Apple CFO Fred Anderson settled cases brought by the SEC concerning their involvement in the options backdating scandal. SEC investigators interviewed Jobs in March 2008 as part of their case against Heinen.
In the deposition, Jobs testified that he requested the 2001 grant later found to be improperly backdated because he was feeling underappreciated by Apple's board of directors. Jobs has only taken $1 in salary a year since his return to Apple and, with the dot-com bust having eroded the value of his stock options, felt he was not being properly compensated for his work at Apple as measured against his peers.
There was a delay between the first proposal of a grant of 7.5 million shares in August 2001 and the final approval of that grant in December, due to haggling between Jobs and the board over the terms of the award. That's when minutes of a fictitious board meeting in October were created by Heinen--according to the SEC--to backdate the option's grant date to a time when Apple's stock price was lower than it was in December. Jobs swore in the deposition that he was unaware of the falsified records.
Jobs also reiterated that he was unaware of the accounting implications of stock-option backdating. It's not illegal to backdate options so long as a company discloses that action and adjusts its books accordingly, but Apple and dozens of Silicon Valley companies over the last eight years did not take that extra step.
In 2007, Anderson claimed that he had informed Jobs of the accounting implications of option backdating, but Apple and Jobs have long maintained that he did not understand the details of such matters.