Steve Jobs implicated in Pixar stock option dust-up
The smoldering controversy over the Apple chief's involvement in stock options reignited once again on Friday after curious timing in a Pixar stock option was discovered by the Wall Street Journal.
The ten-year contract, finalized in March 2001, saw Lasseter granted one million shares whose initial value was dishonestly backdated to a date three months before the deal had been completed — coincidentally, the same day Pixar shares had been at their nadir in December of 2000. The terms effectively guaranteed that Lasseter would turn an immediate $6.4 million profit the day his new employment took effect, even before he received his first paycheck.
Then the CEO of Pixar, Jobs was known to have helped work out the details of the contract and had to put his signature to the deal for it to take effect, the Journal's informant said. However, doubt exists as to how much conscious involvement the company head truly had in the agreement. While his name on the paper implies tacit endorsement of the dubious grant, Jobs himself may not have actually chosen the date.
Still, an intense level of legal scrutiny is bound to follow the often controversial chief. Both the federal government and Pixar's parent company Disney (on whose board Jobs sits) are said to be actively investigating the studio's handling of stock options. And as always seems to be the case these days, Jobs is under the close watch of the government for irregularities in stocks at his very first company, Apple.
It comes as little surprise that none of the involved parties were prepared to comment to the Journal on the day's news. Disney forwarded requests to speak to Jobs to Apple, which in turn said he was unavailable; a similar response followed in attempts to contact Lasseter. Disney itself chose not to comment on the matter.
Shareholders were suitably unimpressed and thrashed Apple's stock value, which tumbled $2.91 to close at $83.27 by the end of trading on Friday evening.
57 Comments
when will it stop?
I don't know.....
Now, someone correct me if I'm wrong, but isn't backdating legal? As long as everyone (the board) agrees to the deal?
Quoting an anonymous source....
"For secrecy sake, we will call him.... 'S. Balmer'..... no no no, that's too obvious...... let's call him..... 'Steve B.' "
"For secrecy sake, we will call him.... 'S. Balmer'..... no no no, that's too obvious...... let's call him..... 'Steve B.' "
"whose initial value was dishonestly backdated"
Sorry for yelling, but BACKDATING STOCK OPTIONS IS NOT ILLEGAL!
Now, hiding it, misrepresenting it, mis-reporting it, etc, can make for irregular (illegal?) accounting. but the backing of the options themselves is not illegal.
I don't subscribe to the WSJ, so I have not read the whole article; but even if Steve Jobs himself picked the date and signed the contract, that does not automatically mean the he was involved in making the accounting entries (and in all likelihood he was not). And while yes, he's was the man in charge, at some point you need to draw the line between CEO and CFO. I know with Enron and the resulting Sarbaines-Oxley laws that line has shifted to place more responsibility on the CEO to know details about financial transactions, but it is still a very poorly defined line that is drawn.