Sunday, January 28, 2007


Federal authorities are investigating 7.5 million stock options that were granted to Steve Jobs, chief executive of the computer company Apple. It appears that, while the granting of these options was finalized in December 2001, they were dated October 2001, when the per-share stock price was $3 lower.

Stock options give you the opportunity to buy a stock at its price on the day the options are issued, regardless of what the price is on the day you purchase the stock, so the backdating increased the value of Jobs' options by about $22.5 million. Once the backdating was revealed, however, a committee of Apple board members exonerated Jobs from any wrongdoing.

"If Mr. Jobs participated in backdating, he should be punished," Alan Murray wrote in The Wall Street Journal. Even so, he continued, "any punishment that hampers his ability to continue running the company would be a mistake. That is punishing the victim, and only compounds the crime."

Who is the victim? Apple shareholders, Murray argues, who have benefited from Apple's stock-price increase under Jobs' leadership, and who were the victims of any backdating. Jobs' departure from the helm would hurt the value of their Apple stock, Murray believes, and thus his job should not be put in jeopardy. What do you think? If Jobs is found to have participated in backdating stock options, should he be allowed to continue to run Apple because he has served the shareholders so well?

Send your thoughts to or post them here by clicking on "comments" or "post a comment" below. Please include your name, your hometown and the name of the newspaper in which you read this column. Readers' comments may appear in an upcoming column.

A NPR radio interview about Apple's back-dating appears at

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, a Web log focused on ethical issues.

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


Anonymous said...

This type of management is not sound management, and he should be excused from service at apple and retire gracefully.

Anonymous said...

Given all the attention to corporate executive wrongdoing in recent years and the emphasis on holding politicians to higher ethical standards, I think it is wrong for Steve Jobs or anybody else to participate in backdating schemes for their personal benefit. Since there is concern that firing him might make even greater victims of Apple’s shareholders, thought might be given to making him give back the money he earned through backdating and adding a penalty for his breach of trust. Let him keep his job on a probationary basis.

Phil Clutts
Harrisburg, NC

Anonymous said...

What matters is whether this “backdating” or really “misdating” is systematic of other corporate governance and financial reporting weakness at Apple. All this fess is about failing to properly disclose at that time an accounting charge that if it had been disclosed, would have likely been dismissed as unimportant by analysts and shareholders. This is a non-cash charge that even with mandatory option expensing today seems to get removed from analyzing a company's true financial situation.

We need to remember the era this occurred in and the widespread attitudes and practices related to granting stock options at that time. Accounting, securities law, stock exchange, and corporate governance changes since then make it very unlikely that companies will do this again.

Given Apple stock price performance and record of product innovativeness, maybe backdating within certain limits (e.g., granting discounted stock options) could be a “good thing.” It reminds me of what President Abraham Lincoln supposedly said when told about General Ulysses S. Grant’s rumored fondness for Kentucky Bourbon Whiskey: He wanted to know what brand of whiskey Grant liked best, so he could send it to all of his other generals.

Bruce Brumberg

Anonymous said...

Steve Jobs never benefited from these backdated shares... they were surrendered to Apple before exercising them. Why all the continued focus on Apple? There are dozens of companies caught up in this backdating mess.

Anonymous said...

If laws were violated, then Mr. Jobs and the company need to be punished regardless of his value to the shareholders.

Backdating is stealing. If stealing becomes the corporate culture, then the shareholders are harmed. Stealing has a way of filtering down through the ranks.

The laws are there to protect all of us from fraud and keep the playing fields even.

No one should be above the law. No matter how brilliant--those same valued employees could have been given the same amounts legally and above board.

If the accounting is merely scary is that?