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Technology Stocks : Apple Inc.

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From: Don Green	10/4/2006 8:26:18 PM
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Jobs apologises as Apple admits manipulating options The Times of London October 05, 2006 STEVE JOBS, the iconic chief executive of Apple Computer, apologised to his shareholders last night after his company admitted manipulating stock options and said that it would have to restate some of its past financial statements as a result. Mr Jobs admitted knowing about “a few instances” of the so-called stock option backdating that Apple last night conceded when it acknowledged changing the grant date of stock options made on 15 days between 1997 and 2002. The company also announced that Fred Anderson, Apple’s former chief financial officer, would resign his position on the board with immediate effect. The statement, released after American markets closed last night, added that Apple’s three-month investigation into its stock option practices “raised serious concerns” relating to two unnamed former executives and that it would pass the findings of its inquiry to the US Securities and Exchange Commission. Mr Jobs said: “I apologise to Apple’s shareholders and employees for these problems, which happened on my watch. They are completely out of character for Apple. 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.” The inquiry found no evidence of misconduct by Mr Jobs or any other member of Apple’s present management team. The practice of backdating stock options increases an executive’s payout by pushing back the grant date of the share options to a time when the share price was lower. This means that backdated share options are already “in the money” when they are actually granted and therefore must be treated as a business expense. As a result, Apple conceded that it would have to restate several of the financial statements it made during the period it manipulated the stock options.

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