Mercury News reports that Steve Jobs has been found to be in the clear when it comes to criminal charges related to the backdated options he received as CEO. Backdating isn’t always illegal, but steps must be followed, including disclosure rules.
In Apple’s case, the company has admitted the grant to Jobs, approved in December 2001, was backdated by two months and that the grant documents were falsified, an act that has been condemned by everyone involved in the matter.
But it was a star-studded board of directors that actually approved the favorable grant date, not Jobs, to end a tough negotiation to compensate him for his company leadership. Among the board notables who approved the grant were Arthur Levinson, Genentech’s president and CEO; Larry Ellison, Oracle’s powerful leader; William Campbell, Intuit’s former CEO; and Millard Drexler, former president and CEO of The Gap. Jobs is also on the board, but did not vote on his own grant.
Legal experts and lawyers familiar with the grant say it would be difficult for prosecutors to base a securities fraud case against Jobs on the backdating of his own grant when it was approved by the board, particularly because most securities fraud indictments allege corporate boards were deceived.
"Jobs can take the defense, `What do I know about the proper accounting for this transaction? I didn’t keep a secret from anybody and assumed the accounting would be proper,"’ said Joseph Grundfest, a Stanford law professor and former SEC commissioner. "That would seem to distinguish the Apple situation."
The article goes on in much greater depth, if you can stomach it. But suffice it to say that everyone in Burbank and Emeryville is breathing a sigh of relief. If Jobs had been convicted it would likely have precluded him from remaining on the Disney Board of Directors, not to mention running his main company, Apple.
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