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Apple fabricated board approval of grant to Jobs - report


Apple Computer chief executive Steve Jobs was awarded 7.5 million stock options in 2001 without the required authorization from the company's board of directors, according to a news report published Wednesday evening.

Citing "people familiar with the matter," the Financial Times website said documents "that purported to show a full board meeting had taken place to approve Mr Jobs' remuneration, as required by Apple's procedures, were later falsified."

Those records are now among the pieces of evidence being weighed by the Securities and Exchange Commission as it decides whether to pursue criminal charges against the company or its officials, the report added.

The stark allegation is the second in as many days related to the ongoing stock-options fiasco currently encompassing the Silicon Valley icon. It arrives on the heels of a similar report of falsified stock-options documents reported by The Recorder on Tuesday.

In its report, the Financial Times points to an Apple filing in 2002 which stated the options under review were handed to Jobs in October 2001, at an exercise price of $18.30 a share.

"However," the publication wrote, "the purported board authorisation was dated near the end of the year, suggesting that the benefits were both not properly authorised and were backdated."

Although Jobs later surrendered those options before they were exercised — implying that he did not benefit from them — he was later handed 10 million split-adjusted shares as a replacement.

In October, a financial columnist argued that while Jobs did not directly benefit from the initial grant, he did so on the ensuing exchange because the value of the 10 million shares were themselves based on favorably chosen "backdated" dates.

Apple spokesman Steve Dowling told the Associated Press on Wednesday that company has turned over to the Securities and Exchange Commission the results of its internal investigation into its historical stock options granting practices, but would not comment further.

Those results are expected to be disclosed in much detail as part of Apple's delayed 10-K for fiscal 2006, now due on Friday.