Apple stock backdating
In such a case, tax deductions would be denied. The possibility of corporate fraud, such as options backdating, is a very real threat even after the many scandals that have been uncovered. The board has expressed complete confidence in Steve and senior management. The media attention that options backdating has received has also played a roll in discouraging future backdating.
Nevertheless, the executives and directors should have realized the considerable consequences should the fraudulent backdating ever be discovered. Investors were the major losers in the scandal. Since directors often serve on more than one board, they form a tight-knit community of interlocking boards. The other major way that backdating can be misleading to investors relates to the method by which the company accounts for the options.
There may have been other directors and executives who were interlocked with boards that had also previously participated in backdated options. Investors have developed methods to detect options backdating more quickly. The unethical acts were at the very top of the corporate ladder and even among the board of directors. The severity of the long term consequence should have compensated for the seemingly small probability of being caught.
These three men had an interest in keeping favor with Jobs since he helped them to get on the board and since they had friendly personal relationships. Notable companies embroiled in the scandal include Broadcom Corp.
Part of the reason that the board may have failed to live up to their responsibilities to the investors was the close ties they had with Jobs. Apple Owns Up to Backdating. That can mean a nice bonus if the company increases in value. Anderson, of Atherton, Calif.
Jobs, Anderson, and Heinen were all respected executives. They were deceived when Apple appeared to be more profitable than they actually were.
Sarbanes Oxley has made options backdating more difficult by shortening the time frame firms have to report options grants. However, such measures will not prevent further commissions of other types of corporate fraud, except to the extent to which they increase the perceived or actual consequences to fraud. Anderson and former Apple general counsel Nancy R. Because of how widespread the behavior was, it never presented a realistic possibility that Jobs would lose his, err, job as part of the scandal. Backdating is legal so long as the company discloses the practice correctly.
Some of the more prominent corporate figures involved in the controversy currently are Steve Jobs and Michael Dell. Typically, execs get the option to purchase a certain amount of stock at a set price. However, Jobs continued to argue over the point at which the options would vest. Some firms have attempted to teach ethical behavior and instill an ethical corporate culture within their firms.
Both Heinen and Anderson personally received millions of dollars in unreported compensation as a result of the backdating. Adding to the pressure to conform was an uncertainty about the consequences of options backdating. Since he or she had already successfully backdated options, it gave that person and the idea more credibility. Some have speculated that Apple could unveil its phone at the Macworld Expo, an event held every January that Apple has often used to showcase new products. Many of the options that Jobs and other executives had been granted were worthless due to the collapse of the tech bubble.
This all but eliminated the opportunity for senior management to engage any meaningful options backdating. Apple Executives Settle Backdating Suit. Such a situation would rank as a public scandal for any large company. Heinen for their alleged roles in backdating Apple options.
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