AT&T Tech Support 360February 1, 2007 12:26 PM PST
Why Apple's board is standing by Jobs
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Some, like security software maker McAfee, have asked their CEO and other top executives to step down, even without acknowledgement of wrongdoing or of executives benefiting financially from the backdating. Others, like Apple, have taken the opposite approach, defending the actions of their CEO, Steve Jobs, and taking a wait-and-see approach to federal investigations.
Is one approach right and the other wrong? A stickler for corporate governance would say McAfee and other companies, including CNET Networks (publisher of News.com), have done the right thing by shareholders. But a realist would say some CEOs have been unfairly booted with a career-damaging footnote to their resumes and that the public doesn't know the details of what's really going on inside a company and shouldn't try to judge.
Even the Securities and Exchange Commission hasn't figured out the proper penalty for companies and executives embroiled in the scandal, according to recent reports. Some executives may have known they were doing something illegal, some might have known it was a murky area, and still others might have had no idea of the accounting mess they were in store for later on.
A realist would also say it's foolish to kill the golden goose unless it's absolutely necessary. At Apple, the golden goose is Jobs, and it is, of course, a board's duty to act on behalf of shareholders.
"Steve Jobs is so closely tied to the success formula of Apple that nobody is going to believe nearly as much in the future of that company the day he walks out the door," said Stephen Mader, vice chairman of executive search firm Christian and Timbers.
Federal investigators are looking into Apple's practice of backdating stock option awards. Hundreds of companies--including CNET Networks--have become embroiled in the problem, in which companies preparing stock option awards occasionally cherry-pick a grant date when the stock price was low, rather than using the price on the date the options were actually awarded.
Technically, backdating is legal (though certainly controversial) if properly accounted for and disclosed, Mader said. Apple has revealed that Jobs was aware that favorable grant dates were being selected, and personally approved some of the dates. However, an investigation conducted by the board of directors and outside counsel found that Jobs did not profit from the backdating and was unaware of the accounting implications, Apple said in announcing the results of its internal inquiry.
Apple has also admitted that someone invented minutes for a meeting that never took place--the one in which Jobs' grants were supposedly approved. The company has said it found no evidence that current members of the company's management team were aware of the fictitious meeting, but the incident clearly occurred on Jobs' watch, as he said when announcing the resignation of former Chief Financial Officer Fred Anderson from Apple's board of directors. An Apple representative declined to comment beyond the public statements about its internal investigation.
In the case of McAfee, Chairman and CEO George Samenuk was said to have "retired" in the company's press release announcing his departure, while President Kevin Weiss was "terminated." Samenuk made a statement that didn't touch on his involvement in McAfee's backdating, but included this line: "I regret that some of the stock option problems identified by the Special Committee occurred on my watch."
See more CNET content tagged:
stock option,
Steve Jobs,
McAfee Inc.,
Apple Computer,
accounting
Also today is a bad time to work for one of these giants. They chew you up and spit you out when you cost too much. Then they send your job to India or China.
BTW Apple makes no hardware fullstop. They just subcontract it out to Foxconn or Flextronics etc.
US style capitalism is like a Pyramid. Unless you are at the top you get nothing, whilst people like Jobs get Billions and then steal to get even more.
say McAfee and other companies, including CNET Networks
(publisher of News.com), have done the right thing by
shareholders." illustrative. If I've read the news correctly the
financial impact on shareholders of these actions was about $84
million as that was the accounting adjustment taken. Compare
this to value added to shareholders pockets during Job's return.
Then compare this to the robber baron CEO's getting their $100
million+ golden parachutes after being dismissed for driving
their company into, or at least toward, the ground. I would
argue this is often why other boards have asked top
management to stand down after something like a backdating
faux-pas, not to be proper corporate governance. Note, I'm not
talking about behavious that has been proven to be criminal.
corporate governance is about protecting shareholder value
because they are not directly represented.
The guy saved a dying company and has been instrumental in revitalizing it as premier hardware and electronics company. If the rules aren't clear about what happened, then no guilt may be assigned in the case.
I suggest that CNET focus more attention and energy on issue of greater importance and clarity.
awaiting his day in court. As it is no one has charged him with
anything. No one is denying what happened.
From what I understand they had a board meeting scheduled.
Stock options were going to be granted at that board meeting.
The meeting didn't take place as scheduled, so they dated the
option to the original meeting date. So what?
This is not a big story, but count on CNET and others to get all
the page views they can out of it.
And thanks for giving it to them, I say. If you want to make a statement to a company, you make it with your wallet. You're complaining about the story, but taking the time to post a heated reply. And thus giving CNET another reason to post another one like it to get more cash and post more stories like this. All of you are smart enough to know that.
Honestly, I don't know if the story is a false accusation or not. I don't really care. But, I also have the feeling that most of you are just enjoying the charity of defending a corporation (Apple) and/or person (Jobs) who really couldn't care less if you defended them or not.
touch.
He incorporates fun, and art, into his work...
1) Apple Mac/OS best user-computer experience & idea has
won.
2) iPod and iTunes proved legal downloading works. And, has
changed that entire industry, and next, Hollywood
3) iPhone
4) He brought Pixar to fruition with several blockbusters, sold it
for Billions
5) He is the largest shareholder in Disney
Why WOULDN'T they want him?!?
focuses on making great products over making great profits.
Funny thing is, he's smart enough to know that making great
products ensures great profits.
Microtrash on the other hand plays the me-too game. Always
waiting to see what the market wants, then delivering. Apple/
Jobs is smart enough to know what the consumer WILL want.
Live the dream. Live Apple!!!!
plus, cheap attacks for a sour revenage......pathetic.
human gene pool they should be taken out back and shot.
eom.