I’ve spent considerable time over the past 24 hours returning media inquiries on recent reports about Apple Computer’s stock options probe. It’s not the easiest thing to focus on from 35,000 feet, give or take.
These are troubling allegations, to be sure. So it is curious that the company has had nothing to say about them since they were raised nearly two days ago. That’s never a good sign when bad news is involved.
The Centre for Corporate & Public Governance issued a statement in response to inquiries it has received from reporters and concerned investors. It also raises some observations about Apple’s board and corporate governance practices, which readers may find of interest.
Steve Jobs, long acclaimed as the farsighted head of Apple Computer, admitted to being somewhat myopic today when an internal investigation by the company’s board revealed that he was aware of manipulation of stock option pricing in order to artificially inflate their benefit to certain employees. He apologized for the oversight and said that, in hindsight, it should never have happened.
What is interesting is that the report came months after the first episodes of stock option manipulation by numerous other companies were raised. It is unlikely that such disclosures would have occurred in the absence of mounting pressure by regulators which has seen an initial trickle of companies who bent the rules turn into a flood. Such circumstances always raise the question in the minds of prudent investors and watchful stakeholders: What else are they not telling us that might be important to know?
When they are running companies behind the scene and not on a public platform, sometimes even legendry CEOs renowned for their vision operate in an ethical blindspot without giving adequate thought as to where their decisions are leading. Still, the uncharacteristic apology by Mr. Jobs, who is known also for his peevish imperiousness, is refreshing. Perhaps someday he can find it in his heart to apologize for all the scratches on my Nano, too.
