Apple Computer gave Chief Executive Officer Steve Jobs 7.5 million stock options in October 2001 without authorization from its board and later falsified documents that said the board had met to approve the grant, according to a Financial Times report on Thursday.
The story, which was attributed to sources familiar with the matter, added to Apple’s woes after a report on Wednesday that former company officials falsified documents involving stock options in order to boost their own profits. That story, in the legal publication The Recorder, also said Jobs had hired his own counsel separate from Apple’s.
Apple revealed earlier this year that an internal investigation found the company had backdated stock option grants between 1997 and 2002 and would probably have to restate some financial results. Jobs was aware of a few instances of the practice but didn’t know the accounting implications and didn’t benefit from any of the grants, the company said at the time.
More information about the accounting problems is likely to come out in a Form 10-K that the company plans to file to the U.S. Securities and Exchange Commission on Friday. Apple has delayed filing the form because of its accounting probe and faces possible delisting from the Nasdaq stock exchange.
Apple spokesman Steve Dowling said the company is providing all results of the investigation to the SEC, but he declined to comment further.
Almost 200 companies have disclosed internal or U.S. government probes in the past several months concerning backdating. The practice involves changing the date of a stock-option grant to give the recipient a bigger profit when the options are exercised. In Jobs’ case, it appears the grant was backdated and not properly authorized, according to the Financial Times. Jobs surrendered the options without exercising them and was later granted stock instead, it reported.
Apple shares (AAPL) closed down US$0.65 to $80.87 on Thursday after plummeting on Wednesday.
By Stephen Lawson, IDG News Service (San Francisco Bureau)
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