“Pixar, the animation studio formerly headed by Apple Computer CEO Steve Jobs, handed out favorably priced options to key employees between 1997 and 2001, according to published reports,” Troy Wolverton reports for TheStreet.com. “In several cases, the options handed out carried a strike price equivalent to the lowest market price of Pixar’s stock in the year they were granted, according a Bloomberg report.”
“In another case, Pixar, which was recently acquired by Walt Disney, granted options right before it announced a key deal with Disney that sent Pixar’s stock up 49%, according to the report,” Wolverton reports. “Among the beneficiaries of the low-priced options, according to Bloomberg, were John Lasseter, the company’s head of creative development; President Edwin Catmull; and Sarah McArthur, Pixar’s vice president of production.”
“A Pixar representative did not return a call seeking comment on the report. Neither Disney nor Pixar has acknowledged any problems to date with Pixar’s past options grants,” Wolverton reports. “The report could serve to give further scrutiny to the role, if any, Jobs played in the granting of the options. Apple has already acknowledged certain “irregularities” in grants made during the same time period, including an outsized one to Jobs himself.”
Wolverton reports, “Jobs on Monday declined to comment about his knowledge of options problems at Apple.”
Full article here.
[Thanks to MacDailyNews Reader “DavidO” for the heads up.]
Related articles:
Apple stock options scandal? What scandal? – August 07, 2006
Class action lawsuit over stock options filed against Apple Computer, Inc. – August 04, 2006
Wall Street forgiving of Apple’s stock option irregularities; CEO Jobs unlikely to be terminated – August 04, 2006
Apple’s stock option irregularities escalate into a scandal as world awaits Steve Jobs’ WWDC keynote – August 04, 2006
Apple warns of profit restatement dating back to 2002 – August 04, 2006
Apple loses 3.5% to $67.15 in premarket trading – August 04, 2006
Apple announces update regarding stock option grants – August 03, 2006
Shareholder’s options suit against Apple alleges ‘striking pattern that could not have been chance’ – July 11, 2006
Apple announces update regarding stock option grants – July 05, 2006
UBS: stock options probe unlikely to hurt Apple – June 30, 2006
Apple joins growing list of companies entangled in stock option ‘irregularities’ – June 29, 2006
Apple to investigate stock option grant ‘irregularities’ made between 1997 and 2001 – June 29, 2006
Either witch hunt or caught with their hands in the cookie jar, only time will tell. We can speculate for the hell of it but in the end that is all it will be
Uh… someone please come up with a plausible explanation as to why both Steve Companies have accounting irregularities during the exact same time frame. Was there something special about 1997-2001 that made this especially likely? I’m sure there is a reasonable explanation that involves Steve not being a crook but the similarities are eerie. Then again this happens to a lot of companies so maybe it is just random chance.
Dear God let’s hope so.
Who cares about this. Where’s my Core 2 Duo iMac!!!
(sorry, I was really hoping to see this come out of the WWDC and was hoping to buy)
Pixar and Disney have no problems with the options. So why is this a story? And no take from MDN yet?
I have a problem with MDN’s options. Or should I say the lack of them. How come digg.com users enjoy a Web 2.0 site full of AJAX, and we here at MDN simply continue to leave anonymous comments with no user preferences and no ability to add friends or block users?
UPGRADE THE SITE PLEASE! Will my comment be removed?
Apple’s irregularities occured from 2002 to 2005, not 1997 to 2001.
Steve is a genius – including his genius at marketing and building almost uncontrollable desire for the next generation of Apple’s products.
We’ll deal with that.
The same genius mind could very well maximize the powerful effect of motivating innovation and creativity by handing out stock options to those capable of such.
In spite of the decided liberal politics of all those in Cupertino, there is a great deal of devotion to the wonders of Capitalism.
Unless he’s really crossed the line of legality, leave him alone!
Hmmm, maybe this is why some say Jobs looks sick?
Hope not. I think Apple would really falter without him running things.
– Mark
Kind of strange two companies run by Jobs is having these issues.
Not a good sign if you ask me.
As Apple stock drops like a stone too.
With a totally boring keynote and announcements of… oh yeah updates to Mail and iCal what does anyone expect?
Jobs wasn’t even involved in the process at Apple. That is governed by a committee overseen by the outside directors. Nothing here, move on.
“Either witch hunt or caught with their hands in the cookie jar,”
We already KNOW they had their hands in the cookie jar. The only question now is whether what they did was criminal, whether any civil liability attaches or whether it was just immoral.
Dory: Hey there, Mr. Grumpy Gills. When life gets you down do you wanna know what you’ve gotta do?
Marlin: No I don’t wanna know.
Dory: [singing] Just keep swimming. Just keep swimming. Just keep swimming, swimming, swimming. What do we do? We swim, swim.
MW: believe
“Jobs wasn’t even involved in the process at Apple”
By that I presume you mean he didn’t sit on the committee.
Do you seriously believe he didn’t influence this policy? Hmmm How Many Million Dollars shall I give Myself today…
Al, Larry, have you got that rubber stamp ready yet?
A lot of companies that grant options to their employees will set the grant date favorably. This has been happening for years especially since the stock market has been doing well.
If this is bad practice, then the SEC should make it so and companies should abide by those rules from then on.
Frankly I don’t see what the big deal is. The company is paying for the cost of these options and it is a very good way to reward your workers, especially since Jobs drives them like slaves. Neither of these companies pays out dividends to their shareholders, so the profit is simply going into the company’s warchest.
As a former officer of a couple corporations and still the officer of another, and as someone who’s has stock options with valuations as high as a few million dollars, I can say without any reservation that 99.99% of the people talking and writing about these stock option investigations have absolutely no idea what they are talking about.
I have heard of absolutely no facts which would lead me to believe that any Apple or Pixar employee has done anything illegal or even liable under civil action. In the opposite sense I have heard of no facts which state they have not.
It’s all (yes, all) been speculation and innuendo. No facts — or even anything close to facts — have been presented.
Hell, neither the FTC nor SEC has launched any form of investigation. No one outside those organizations know if they ever will.
Let’s all wait until at least *some* real facts are presented. Then we can shout, “I knew it all along.”
“If this is bad practice, then the SEC should make it so “
Fact is they DID make it so.
If you do this, you must tell the shareholders that you did this and account for the options properly, not pretend that you granted them on that day.
Granting at the year’s lowest price would have been fine if the much higher value of in the money options was recognised.
The problem is not with the chosen strike price but with the Fraudulent Accounting for these options.
“so the profit is simply going into the company’s warchest.”
Don’t you mean diluting the shareholders return and ultimately coming out of the shareholder’s pockets? Because that’s how it works.
That’s why you must tell the shareholders what you’re doing so they can decide whether they like that idea or not. And they may agree with you that to give them in the money options is still a good way to reward people. But they must be told.
http://viewfromthemountain.typepad.com/applepeels/2006/08/the_kiss_up_cul.html
The article was written by former Apple employee David Sobotta and also linked on Daring Fireball
rasterbator – the reason MDN does not go the route you suggested is that now one can write anonymously and many, many times under multiple names. Hence it looks like there are lots and lots of people visiting and commenting at MDN.
When in reality there are very few people that comment here.
And very few people would register to add comments. Its like who cares?
rasterbator-here i am again.
and yes, rasterbator, i am now commenting on my swimbot comment. That guy is an idiot.
And I am also half of the names above that.
Guess which ones?