Jobs knew. Jobs apologizes. The CFO falls on his sword...again.
Apple CEO Jobs: 'I apologize'
Mac maker finds options grants irregularities and Steve Jobs knew.
October 4, 2006
Apple Computer said Wednesday that it has found irregularities in its stock options grants resulting from an internal probe that also discovered company CEO Steve Jobs knew of the activities.
Also, former Apple CFO Fred Anderson resigned from the board of directors.
The computer maker found irregularities in a grant from January 2002. The company also said that stock option grants made on 15 dates between 1997 and 2002 appeared to have grant dates that predated the approval of those grants. The grants concern the issue of backdated stock options.
Backdating stock options is not illegal as long as they are properly accounted for and disclosed.
Apple CEO Steve Jobs knew of the favorable grants, did not benefit, nor was he aware of the accounting implications, Apple said in a statement.
"I apologize to Apple's shareholders and employees for these problems, which happened on my watch. They are completely out of character for Apple," Apple CEO Steve Jobs said. "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."
Apple's special committee’s investigation, however, cited serious concerns over the actions of two former officers in connection with accounting, recording, and reporting of stock option grants. Apple's committee said the probe found no misconduct by members of the company's current management team.
“The company will provide all details regarding their actions to the SEC,” Apple reported on the committee findings.
Former CFO Resigns
The Mac maker also announced former Apple CFO Fred Anderson has resigned from the board of directors. Mr. Anderson, who was chief financial officer from 1996 to 2004, told the company that he believes it is in Apple's best interests, according to the computer maker.
Apple said that it will likely need to restate financial reports to record noncash charges for compensation expenses related to past stock option grants.
The Cupertino, California, company's special committee of its board of directors reported the findings after a three-month internal probe into its options-granting practices that began in June (see Apple Has an Option Problem).
Apple shares were down $0.58 at $74.80 in after-hours trading.
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