Jobs Apologizes for Apple Stock Options
Apple Computer Inc. CEO Steve Jobs apologized Wednesday for the company's past stock-option practices after a three-month internal investigation raised concerns over how some grants were handled between 1997 and 2002.
The iPod and Macintosh computer maker also announced the resignation of former Chief Financial Officer Fred Anderson from the company's board of directors.
The company said Jobs knew that some grants had been given favorable dates "in a few instances," but he did not benefit from them and was not aware of the accounting implications.
"I apologize to Apple's shareholders and employees for these problems, which happened on my watch," Jobs said in a statement . "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."
Shares of Apple shed 57 cents to $74.81 in after-market trading after closing up $1.30, or 1.8 percent, on the Nasdaq Stock Market on Wednesday.
Apple, one of the most prominent companies caught in the nationwide stock options mishandling scandal, said its investigation into the matter did not uncover any misconduct by any member of Apple's current management team, but that it did raise "serious concerns" regarding the actions of two former officers.
The company did not name the two officers but announced that Anderson, who served as the company's chief financial officer from 1996 until 2004, had resigned from the company board. Apple said it will provide all details of their actions to the Securities and Exchange Commission.
The probe found irregularities in the recording of stock option grants made on 15 dates between 1997 and 2002, the company said. The grants made had dates that preceded the approval of those grants.
More than 100 other companies nationwide are entangled in similar stock-option trouble. In most of those instances, companies have traced their problems to "backdating" issues.
Under this practice, insiders could make the rewards more lucrative by retroactively pinning the option's exercise price to a low point in the stock's value.
Apple has said it will have to restate some earnings as a result. The looming restatements threaten to wipe out some of the profits generated during the most prosperous stretch in Apple's 30-year history as millions of consumers snapped up the company's ubiquitous iPod. Apple has reported profits totaling $3.1 billion during the past four years.
The company's special committee conducting the investigation examined more than 650,000 e-mails and documents, and conducted interviews with more than 40 current and former employees, directors and advisers.