Sour Apple

9 January 2007 By Robert Cyran Follow @rob_cyran

The company s faithful are wondering how they can get the new cell phoneiPod Steve Jobs unveiled at his annual MacWorld love fest. Investors should be more exercised over another question. Will prosecutors investigating options scandals make an example of Jobs?

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Two weeks ago, a special committee investigating option grants at Apple has stated that chief executive Steve Jobs received backdated stock options on two occasions. In 2000, he received options on 10m shares. In 2001, he received 7.5m.

In the first case, the grant was authorised by the board six days after the grant's terms were finalised. The second grant was recorded as being approved at a special board meeting on October 19. No meeting occurred on that date.

The company stated that, Although CEO Steve Jobs was aware or recommended the selection of some favourable grant dates, he did not receive or financially benefit from these grants or appreciate the accounting implications.

The committee was composed of board members Al Gore, Eric Schmidt and Jerome York. York was a member of Apple's compensation committee in 2001. According to people familiar with the situation, York recused himself on committee matters where he had a potential conflict of interest.

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