Apple investors hear Jobs on option scandal
Apple Inc. Chief Executive Steve Jobs, pressed by shareholders to detail his role in a stock option scandal, said Thursday that the issue was put to rest after a Securities and Exchange Commission probe 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 in Cupertino, Calif., where it is based.
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 Jobs knew more about the misdating of options.
Apple in December said Jobs was aware of some backdating of grants other than his own but cleared him of any misconduct.
His comments come two weeks after Apple’s board, reelected by shareholders Thursday, defended Jobs and expressed confidence in his integrity and ability to lead the maker of Macintosh computers and iPod music players.
Anderson, sued along with Apple former General Counsel Nancy Heinen by the SEC, said he had cautioned Jobs that the company might 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.
“But I’m not asking the company to make good on that,” he said to laughter from shareholders.
Shares of Apple rose 46 cents to $107.34. They have climbed 52% in the last year.
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, adding potential profit for the recipient. Backdating can be illegal because it hides costs from investors and regulators.
Apple’s internal probe, led by board member and former U.S. Vice President Al Gore, found that 6,428 grants issued from 1997 to 2002 were backdated.
Shareholders showed their support for Jobs’ leadership by voting down four proposals aimed at changing executive compensation, including one addressing option backdating.