Investors wonder whether Apple Computer may have backdated option grants, or reset the grant date (and therefore, strike price) to make them more attractive for the recipients, as the company announced today just after the bell that it found "irregularities" in certain option grants several years ago.
One of the irregular grants was made to Steve Jobs, sometime between 1997 and 2001, although Apple says that it was cancelled quickly and the company's CEO made no financial gain as a result.
While it's certainly commendable that Apple is being proactive about the announcement, I can only wonder whether some other employees did record a significant gain in those boom years of 1999 and 2000 -- when this sort of crooked practice was whispered to be quite common.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
Reader Comments (Page 1 of 1)
6-29-2006 @ 7:15PM
kev said...
Who cares?
6-29-2006 @ 7:19PM
Bob V said...
I have to admit that despite the hype it isn't clear to me what is crooked about this practice. It seems no different to me than giving an employee a bonus. It's a monetary, after-the-fact reward for performance. It just happens to be done through the pricing of an option rather than through the payment of cash. The net effect on shareholders is the same from what I can see.
6-30-2006 @ 4:30AM
Kelley Ritchey said...
We have very little to go on at this stage, only some discovered "irregularities" in options grants. We can't be sure if it was backdating, though Business Week suggested that an August 5 options grant was one day before major news that propelled the stock up 48% over two days.
Some say CEO Jobs options were later canceled and he was issued stock. However, if the stock grant was based on the value of the options (which you think it would have been), it doesn't mean Jobs didn't benefit-time will tell.
Contrary to the previous comment, this could have impact on compensation expenses and taxes, if the "irregularities" turn out to be backdating.