Apple Computer CEO Steve Jobs apologized to shareholders Wednesday after an internal investigation found that he had been aware of the company’s practice of “backdating” employee stock options.
“I apologize to Apple’s shareholders and employees for these problems, which happened on my watch,” Jobs said in a statement. “They are completely out of character for Apple.”
A three-month investigation by Apple’s board of directors found that the company had backdated option grants made on 15 dates between 1997 and 2002. Its findings raised “serious concerns” about the roles that two former officers had played in the matter, Apple said.
Apple did not identify these former officers, but the company’s chief financial officer at the time of the grants, Fred Anderson, has resigned from Apple’s board of directors, saying this is “in Apple’s best interests,” Apple announced Wednesday.
Although investigators found no misconduct by any member of Apple’s current management, Jobs was aware of “a few instances” of the practice, Apple said. Jobs did not benefit from the backdated grants and “was unaware of the accounting implications.”
A number of Silicon Valley companies have been embroiled in the growing controversy over the practice of backdating, or allowing employees to be granted stock options dated from an earlier time, when the trading price of these options was lower.
McAfee, Broadcom, Sycamore Networks and Rambus have been implicated in the scandal, and last June, criminal charges were filed against executives from Brocade Communications Systems in connection with that company’s stock option granting practices.
Apple believes it will have to restate its past SEC filings in order to record charges for its option grants. The company is working “to ensure that this never happens again,” Jobs said.
-Robert McMillan, IDG News Service (San Francisco Bureau)
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