Late Friday night appears to be the preferred time for burying announcing the latest on the stock option backdating foofaraw. Both Apple and Disney released some information last night. I’ll do my best to muddle through what exactly this means.
Apple first. The company announced that 114,695 options granted to employees between 1997 and 2002 were mistakenly given dates that preceded the finalization of those grants, thus making the price to exercise the options lower than it would have been had the correct date been used. Any of those options used after 2005 can be taxed by the federal goverment, and require a 20% penalty and interest charges. Ouch. Employees who opt to have their options re-priced to the correct amount before April 16 can avoid those charges. High muckety-mucks at Apple, including the board of directors and executive team, are ineligible for the offer.
Meanwhile, over at the Mouse House, Disney concluded its own internal investigation of the backdating issues that have likewise plagued Pixar (now, of course, a Disney subsidiary). Many had suggested that since both Pixar and Apple had had stock option issues, Steve Jobs must somehow be involved, but Disney said nobody associated with the company was involved in “intentional or deliberate acts of misconduct.” As with Apple, the backdated option affects a number of employees—rather than give them the alternative to re-price their options, as per Apple’s plan, Disney rather stated that it would pay the tax bills associated with the backdated options. As of yet, they’ve announced no caveat that would exempt Jobs.
It’s not terribly surprising that the internal investigation found Steve in the clear, but at the same time, you have to figure that Disney is smart enough to know that they’ll probably end up getting caught if there’s a coverup. Of course, federal investigations into both Apple’s and Pixar’s backdating are still ongoing; that will be the final word on who’s liable for what.
"Many had suggested that since both Pixar and Apple had had stock option issues, Steve Jobs must somehow be involved"
And I maintain that it would be suspicious if it happened at one company and not the other. I found it reassuring to see that his behavior was consistent, if shady.