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Apple CEO clear of stock scandal?

updated 04:10 pm EDT, Thu October 5, 2006

Jobs clear of scandal?

Several industry analysts today agreed that Apple CEO Steve Jobs is very unlikely to lose his executive role at the Cupertino-based company, following reports that Jobs knew of the options backdating but was unaware of possible accounting implications. "Regardless of the outcome and as we have mentioned before, we continue to believe that even in the worst case scenario where Apple is guilty of improper options grants, we do not believe Steve Jobs is liable, the reason being the compensation committee at Apple is run by an independent board that is not comprised of employees of Apple," said American Technology Research senior analyst Shaw Wu. Gene Munster of Piper Jaffray discounts any possibility of Jobs being forced out of Apple: "The findings concluded no legal wrong-doing for Jobs, thereby eliminating the remote risk to Jobs' position at Apple."

Munster points to the resignation of Apple's former CFO Fred Anderson from the company's board of directors, as well as the greater than expected number of impacted grants. "We were surprised to see the raw number of option grants impacted by the backdating," the analyst said. "Apple will take a non-cash charge for options related compensation expense. In addition Apple will pay back taxes, which we estimate will be less than $50 million, which would be less than 0.6 percent of Apple's cash on the balance sheet."

Richard Farmer of Merill Lynch agreed: "Although Steve Jobs may be tainted by the admission that he knew of favorable grant dates, ultimately we suspect his tenure as CEO is likely to continue, assuming regulators concur with the assertion that he was unaware of accounting implications, and other matters."




by MacNN Staff

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