The bloom may be coming off the rose for Steve Jobs as investigators at the U.S. Securities and Exchange Commission scrutinize the timing of a 2001 options grant that netted Apple's charismatic CEO an estimated $20 million, according to a report today in the Wall Street Journal.
The paper reported on Friday that SEC investigators are interested in the December, 2001 transaction that granted options for 7.5 million Apple shares. The price on those shares was set at an October, 2001 date. The difference in prices amounted to more than a profit of more than $20 million for Mr. Jobs.
In an annual 10-K filing to the SEC in late December, Apple acknowledged that an internal investigation uncovered that Jobs was aware or recommended the selection of some favorable grant dates but did not financially benefit from them or "appreciate the accounting implications" of the grants.
In that statement, Apple said that the grant was originally approved at a Board meeting on August 29, 2001, with an exercise price of $17.83, but that the terms of the grant were not finalized until December 18 of that year. However, the grant was dated October 19, 2001, with an exercise price of $18.30, far lower than the December 18 price of $21.01. Approval for the grant was improperly recorded as occurring at a special Board meeting on October 19, 2001.
"Such a special Board meeting did not occur," Apple said.
At the same time, Apple argued in its 10-K that there was "no evidence that any current member of management was aware of this irregularity."
According to the report, the SEC is interested in talking to former company CFO Fred Anderson, who resigned in October, as well as former company attorneys Wendy Howell and general counsel Nancy Heinen regarding the dating of the December grant and the false paperwork regarding the October Board meeting.
Both Anderson and Heinen stepped down in recent months in moves that were believed to be linked to Apple's internal investigation of the options timing. The Wall Street Journal reports that Howell was also dismissed from the company last month.
Apple did not respond to requests for comment about the ongoing investigation prior to publication.
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