Stock options: Jobs knew, apologizes
updated 05:10 pm EDT, Wed October 4, 2006
Jobs apologizes for issues
Apple today announced that its current CEO Steve Jobs knew about some of the stock option irregularities that has drawn much attention from the media (as well as investor lawsuits), but said it found no evidence of misconduct of the current management team; however, Jobs did offer a formal apology for the accounting irregularities "under his watch and the company did announce the resignation of former CFO Fred Anderson from Apple's Board of Directors: "I apologize to Apple's shareholders and employees for these problems, which happened on my watch. They are completely out of character for Apple," said Steve Jobs, Apple's CEO. "We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again." Anderson, who served as Apple's CFO from 1996 until 2004, said that he believed that it is in Apple's best interests that he resign from the board at this time.
The company said that stock option grants made on 15 dates between 1997 and 2002 appear to have grant dates that precede the approval of those grants. In a few instances, Apple CEO Steve Jobs was aware that favorable grant dates had been selected, but he did not receive or otherwise benefit from these grants and was unaware of the accounting implications.
The company also noted "serious concerns" regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants, but did not provide their names. Apple, however, said it will provide all details regarding their actions to the SEC.
Apple said it believes that it will likely need to restate its historical financial statements to record non-cash charges for compensation expense relating to past stock option grants.
"The company and its independent auditors are reviewing recent accounting guidance published by the SEC, and have not yet determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement," Apple said in a statement. "The company continues to proactively inform the SEC of its findings."
The on-going investigation, announced in late June, caused a flurry of investor lawsuits and delayed many of Apple's SEC filings, potentially leading to the possible--but unlikely scenario--of delistment from the NASDAQ.
