Stock options issue settled, Jobs says

Apple CEO cites probe by SEC at meeting

May 11, 2007|By BLOOMBERG NEWS

CUPERTINO, Calif. -- Apple Inc. Chief Executive Officer Steven P. Jobs, pressed by shareholders to detail his role in a stock-options scandal, said yesterday that the issue was put to rest after a Securities and Exchange Commission investigation cleared the company.

"Unless you think there's a conspiracy theory involving the SEC, too, I don't know what else to say," Jobs told investors at the company's annual meeting.

He read, twice, an April 24 statement by the SEC praising Apple's "swift, extensive and extraordinary cooperation," and said former finance chief Fred Anderson "got some things wrong" in statements claiming that Jobs knew more about misdating of options. In December, Apple said that Jobs was aware of some backdating of grants other than his own and cleared him of any misconduct.

Jobs' comments come two weeks after Apple's board, re-elected by shareholders yesterday, defended him and expressed confidence in his integrity and ability to lead the maker of Macintosh computers and iPod music players.

Anderson, sued by the SEC along with Apple's former general counsel Nancy Heinen, said he had cautioned Jobs that the company may need to take a charge for stock-option grants, an assertion that seemed to undermine findings of Apple's internal probe.

Jobs also told investors that a backdated grant he received in 2001, which was later canceled and replaced with restricted shares, was granted at a higher stock price than what the board had originally approved.

Shares of Apple rose 46 cents to close at $107.34 yesterday on the Nasdaq stock market. They have climbed 52 percent in 12 months.

More than 200 companies have disclosed internal or government probes into stock-option backdating. The practice sets options' grant dates to times when the underlying stock traded lower, building in extra profit for the recipient.

Apple's internal probe, led by board member and former Vice President Al Gore, found that 6,428 grants issued between 1997 and 2002 were backdated. That included one that appeared to be given final approval at an October 2001 board meeting that never took place.

Jobs said the board had originally approved the grant in August 2001, when the shares were trading even higher.

Shareholders showed their support for Jobs's leadership by voting down four proposals aimed at changing executive compensation, including one addressing options backdating.

Jobs, dressed in his trademark jeans and black turtleneck, said he was responsible for recommending executive compensation other than his own as part of his job. He earns a salary of $1 a year.

"I get 50 cents a year for just showing up and the other 50 cents for my performance," he joked.

Apple reported an 88 percent surge in profit last month on better-than-expected sales of Macs and iPods.

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