Companies
Apple tries to draw line under stock options scandal
US computer and software company,
Apple, has recognised a non-cash charge of
$84m, including $7m and $4m for financial years 2005 and 2006 respectively,
following an investigation into its stock option granting practices.
The company reported the restatement as part of the filing of its accounts
for the year to 30 September 2006, which it had been forced to delay. The
restatement arises from option grants made between 1997 and 2002 and no grants
after the end of 2002 required accounting adjustments.
Al Gore, former US vice president and chairman of the special committee of
outside directors set up to investigate allegations of stock option backdating,
said the committee and its independent counsel and forensic accountants had
performed an exhaustive investigation of Apple's practices. An analysis was made
of grants made on 259 dates and it was found that on 42 of these the dates
recorded were not the proper measurement dates.
Apple admitted that chief executive, Steve Jobs, was aware or recommended the
selection of some favourable grant dates but said he did not receive or
financially benefit from these grants or did not appreciate the accounting
implications. In a joint statement with Jerome York, chair of Apple's audit and
finance committee Gore said the board of directors had complete confidence in
Jobs and the senior management team at Apple. The inquiry exonerated all members
of current management.
The company is also facing legal action relating to backdating of stock
options begun since it launched its investigation in June last year. The results
of its investigation has been passed to the US
Securities and Exchange Commission and the
US Attorney's Office.
If Jobs was forced out over the stock options scandal it would be disastrous,
according to Jeremy Warner, writing in
The Independent (29 December) because he seems to personify the company and there is no obvious successor. Without him, Warner suggested, the
company could fall apart. The editorial in the
Financial Times (FT, 30/31 December) agreed with Warner's assessment and
said that Apple was determined to retain Jobs when it first uncovered evidence
of options backdating. The FT criticised the way the company conducted its
inquiry and the way information was disclosed and suggested that Jobs came close
to wrongdoing and Apple should make it clear that any questionable conduct
should not be allowed to occur no matter how invaluable he is.
Links
Apple
Securities and Exchange Commission
US Attorney's Office
The Independent
January, 2007 |
