In a measured and persuasive column posted this morning, New York Times writer Joe Nocera provides all the relevant background and cuts through the irrelevant rationalizations on his way to this sound conclusion: If this stock-options backdating business matters enough to cost other CEOs their positions, other executives their millions, and see a few indicted – and it does matter enough – then it matters enough to put the screws to Steve Jobs in a much more vigorous manner than has been applied by Apple’s board of directors and federal regulators.
This week’s series of events saw the Securities and Exchange Commission come down on a pair of former Apple executives – CFO Fred Anderson and general counsel Nancy Heinen – followed by Anderson pointing the finger of blame at Jobs and the Apple board issuing a statement of support for its rock star. And, coincidentally, the company announced sterling financial results and saw its stock price reach new heights.
So, those who have Times Select accounts should read the Nocera piece. For those who don’t, here are a few choice selections:
(Heinen and Anderson) were the two executives the Apple board has been pointing the finger at ever since it completed its internal investigation last fall. The S.E.C. seemed to agree: its body language this week strongly suggested that it had zero interest in pursuing Mr. Jobs.
The agency’s position seems to be that the financial chief and general counsel are the ones who are supposed to ensure that options are handled correctly, and therefore both Mr. Jobs and the Apple board are off the hook.
As appealing as that thinking may to Apple Nation, it doesn’t exactly square with the facts as they are known, Nocera argues.
With all the finger-pointing, it is difficult to parse whether Mr. Anderson, a wealthy, widely respected figure in Silicon Valley, did something deserving of government sanction. What is clear, however, is that Mr. Jobs does not deserve the free ride he’s been getting from the Apple board, the company’s investors and government regulators.
I am not saying Mr. Jobs committed a crime. What I am saying is that it is pretty obvious by now that he was extremely involved in both of the options grants that have become such problems.
So it is hard to see how he doesn’t deserve his share of the blame for what happened.
In the piece, Nocera spells out in great detail the role Jobs played in both of the options situations that have come under scrutiny. And, he rues that such details may not be the central point in the minds of some.
There are lots of people in Silicon Valley who strongly believe that this sequence of events is hardly worth a parking ticket, much less a big-time S.E.C. investigation. But the S.E.C. clearly viewed it as serious enough to charge Mr. Anderson. …
What is particularly galling is the double standard. You hear from lots of sophisticated investors that it would be terrible if Mr. Jobs were forced out at Apple. How, they say, would that help Apple shareholders? But lots of other chiefs have lost their jobs because of options backdating, and several have even been indicted. However indispensable he may be, the notion that Mr. Jobs can’t be touched because he’s Steve Jobs is something terribly corrosive.
Nocera begins his column with an anecdote about Jobs flipping out over a June 2001 cover story in Fortune magazine – one Nocera helped prepare – that pictured him under the headline: “Inside the Great CEO Pay Heist.” The negative publicity sparked by that story set into motion the initial stock-options restructuring that brought Jobs and Apple to the position in which they stew today, according to Nocera.
Jobs would do well to take this morning’s press broadside a bit more in stride.
Everyone else would do well to give it their full consideration.
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