updated 01:20 pm EDT, Thu August 16, 2007
CEO now owns 5.5M shares
Apple's CEO Steve Jobs netted more than $13 million in potential profit this week after exercising 120,000 options, according to an SEC filing. The options, which are the his sole source of compensation from Apple, were priced at $5.75 each, representing a total purchase price of $690,000 for the shares, worth somewhere in the neighborhood of $14 million when the options were exercised. Jobs now owns 5.5 million shares of Apple, which are worth about $620 million at the current price. According to reports, he has no intention of selling the newly acquired stock. Unfortunately for Jobs, shares of Apple are down almost $8 (over 6 percent) in mid-day trading today, hovering around $112.
In April of this year, the SEC today said that it would not file an enforcement action against Apple in connection with the agency's stock-options dating investigation. Following public claims that Apple's chief executive knew about backdated stock options, the SEC said that Apple's 'extraordinary' cooperation has won it points with the US regulatory agency and that the SEC will not seek formal action the Cupertino-based company, after the SEC filed two civil lawsuits against former Apple executives and agreed to a $3.5 million settlement with Anderson.
Earlier this month, a round of votes on shareholder proposals concerning executive compensation and options backdating at Apple show increasing investor desire for regulation of the way company managers are paid, and the methods by which they are awarded option grants. Although the measures failed to carry a majority, some of the proposals -- calling for links between stock performance and executive pay, a ban on options backdating, among others -- garnered 40 percent or more of the share votes, meaning they held strong appeal among investors other than those who originally broached the proposals.