Will Jobs Keep His Job?

Share
Copy

Apple, the giant technology company, says its CEO, Steve Jobs, has done nothing wrong.

And while the government this week alleged that there was securities fraud at the company, it placed the blame squarely on Apple's former chief financial officer Fred Anderson and former general counsel Nancy Heinen.

But now the former CFO says that Jobs knew more than he is letting on.

Jobs is a long way away from losing his post -- industry watchers were extremely reluctant to speculate about his future -- but dozens of top executives involved with backdating at their own companies have been forced to leave.

Nobody but Anderson is saying that Jobs has done anything wrong, but even the remote possibility of his departure has left some investors struggling to imagine a post-Jobs world at Apple.

"Steve Jobs is synonymous with Apple. In reality if he isn't there, the company is a totally different company," said Tim Bajarin, president of Creative Strategies, a technology consulting firm. "He is the heart and soul of Apple, and without Jobs' driving vision and innovation, Apple would most likely be just another computer company."

Bajarin said prior estimates said that Jobs had added $20 billion to the company's overall value.

Even with this cloud hanging over the company, sales are still strong at Apple.

The company's extremely popular iPod continues to fly off store shelves, and sales of Macintosh computers remain strong. There is also a lot of hype surrounding the company's forthcoming release of the iPhone, a cell phone, personal organizer and MP3 player that allows users to surf the Web and check e-mail.

Wednesday afternoon the company released its quarterly earnings, showing an 88 percent increase that sent its shares higher than $100 for the first time.

So, amid the prosperity, who is responsible for Apple's backdating, and is it possible that it could still ultimately hurt a company that seems otherwise invincible these days?

The Backdating Problem

The company's backdating scandal stems back to 2001. At that point, some Apple executives, including Jobs, were given backdated stock options -- meaning the company allowed the executives to exercise stock options on dates that would be most financially advantageous, possibly illegally.

An internal inquiry by the company cleared Jobs of any wrongdoing, but the Securities and Exchange Commission continued to investigate.

On Tuesday the SEC announced that it was filing a securities fraud lawsuit against two Apple executives: Anderson and Heinen.

On the same day, it was announced that Anderson had agreed to pay $3.5 million in fines to settle his suit. Heinen is fighting the charges.

Some industry watchers believed that the exclusion of Jobs in the SEC announcement had exonerated him and would allow the company to move on.

But that sentiment was quickly shattered when Anderson asserted that Jobs had been personally involved in the backdating scandal, renewing speculation on whether Jobs' role could have legal ramifications for the CEO.

The SEC has not commented on whether Anderson's allegations might further implicate Jobs.

Jobs sits on the board of directors for the Walt Disney Co., parent company of ABC.

So What Is Backdating?

Stock options are often given to executives as a form of compensation. The holder of an option is allowed to purchase stock at a later date at a price set when the option is granted.

Page
  • 1
  • |
  • 2
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...