Sunday, March 04, 2007

SOUND OFF: BACKDATING OPTIONS

My readers were of mixed opinion on whether Steve Jobs, chief executive of the computer company Apple, should be allowed to continue running the company even if federal authorities found that he had participated in backdating stock options that were granted to him in December 2001. A Wall Street Journal columnist argued that doing so would punish the victim "and only compounds the crime."

To be clear, so far Jobs has not been found guilty of any wrongdoing, so the current discussion is only hypothetical. Nonetheless, strong opinions were not in short supply.

"If laws were violated, then Mr. Jobs and the company need to be punished regardless of his value to the shareholders," writes a reader from Madison, Wisc.

To Charlie Seng of Lancaster, S.C., however, the issue isn't so black-and-white.

"People generally can't believe that wealthy people got their money honestly," Seng writes. "When people criticize corporate leaders ...such criticism ... must be done with great care and only with expert knowledge."

Bruce Brumberg of Brookline, Mass., also sees a more complex issue, but focuses on when the alleged infractions took place. "What matters is whether this backdating ... is symptomatic of other ... financial-reporting weakness at Apple," Brumberg writes. "We need to remember the era that this occurred in and the widespread attitudes and practices related to granting stock options. Accounting, securities-law, stock-exchange and corporate-governance changes since then make it very unlikely that companies will do this again."

Check out other opinions at http://jeffreyseglin.blogspot.com/2007/01/sound-off-apple-options.html or post your own by clicking on "comments" or "post a comment" below.

Jeffrey L. Seglin, author of "The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business" (Smith Kerr, 2006), is an associate professor at Emerson College in Boston, where he teaches writing and ethics. He is also the administrator of http://www.jeffreyseglin.com, a Web log focused on ethical issues.

Do you have ethical questions that you need answered? Send them to rightthing@nytimes.com or to "The Right Thing," New York Times Syndicate, 609 Greenwich St., 6th floor, New York, N.Y. 10014-3610.

1 comment:

Anonymous said...

I can't think of anything any less "ethical" than punishing Jobs like this because of some minor "cooking of the books". I think this is less a matter of ethics (obviously the backdating options is sleazy!) but I and most Americans, do not believe it is the job of any government (national or local) to manage ethics in business. Think "Martha Stewart" and how a good woman had to spend time in jail because of some disagreement over a stock transaction and I think backdating of stock options falls into much the same category of ethical wrongdoing. We do not need the government getting into managing business. Committing a crime by a business is one thing, rewarding the founder of the Apple computer with favorable stock options is another thing entirely and not a crime. There is too much concern about people doing things some people don't like and treating that as a crime and way too much concern by our government over matters of uneven ethics. Take steroids in sports - this is a private matter between the players, the union and the sport's management - let them solve it, we do not need Congress getting into private business and sports is a business.

Charlie Seng
Lancaster, SC

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