OK, I'll return the $85 million, but I'm keeping the pony!

Remember that options-for-shares swap Jobs got back in 2003 the Macalope  mentioned yesterday?  Well, Graef Crystal at Bloomberg noticed the same thing (antler tip to TUAW).

Crystal did a little checking and found that

The strike price of that grant was equal to the lowest closing price of Apple stock in the 56- and 30-calendar day periods preceding the grant and in the 30- 56- and 90-day periods following the grant.

Those grants, you may remember, were then exchanged for actual stock which, Crystal says, was basically of equal value using a likely valuation method.

Crystal suggests that Jobs either return $85 million – basically the difference between what he got at the favorable strike price and what he would have gotten if Apple had used an average price at the time he was first able to sell his shares – or not take any further compensation for a while.

Now, Crystal is a little pissy about the whole thing.

I’d sure like it if someone gave me a $75 million non- benefit.

Oh, really?  OK, then.  Just go out and start one of the preeminent technology companies in the world, get fired, start another company, get the first one to buy the second one, squeeze out the guy that brought you back and then negotiate yourself a sweet little $75 million non-benefit.

It’s not so easy being Steve, is it, Mr. Pissy Pants?

While it seems unlikely to the Macalope that Apple’s bean counters didn’t want to bother Jobs’ pretty little head with the detail that he was being awarded a favorable strike price, it’s certainly possible he didn’t know there was anything wrong with it.

That said, it does seem that Jobs could remove any hint of impropriety by returning something.  Perhaps there are other valuation methodologies than Crystal’s that would keep Jobs from having to root through the sofa looking for spare change.

DISCLAIMER:  The Macalope owns an insignificant number of Apple shares.

Trackbacks Comments
  • Insignificant my ass, Macalope. You’re clearly trying to help Apple by pointing out Steve’s potential irregularities, and, er… er…


  • “One other thing I probably should tell you, because if I don’t they’ll probably be saying this about me, too. We did get something, a gift, after the election. A man down in Texas heard Pat on the radio mention the fact that our two youngsters would like to have a dog. And believe it or not, the day before we left on this campaign trip we got a message from Union Station in Baltimore, saying they had a package for us. We went down to get it. You know what it was? It was a little cocker spaniel dog in a crate that he’d sent all the way from Texas, black and white, spotted. And our little girl Tricia, the six year old, named it “Checkers.” And you know, the kids, like all kids, love the dog, and I just want to say this, right now, that regardless of what they say about it, we’re gonna keep it.”

  • He should refuse his salary for the next 5 years. That’ll learn him. 😉

  • rahrens:

    Return his salary for the next five years? Yeah, he’d be glad to do that – his salary is only $1 a year! I’ll only take him another 16,999,995 years to finish paying it off at that rate!

  • DB:

    There isn’t anything wrong with giving Jobs a favourable strike price. It’s only illegal if they didn’t report it.

  • KenC:

    So, Steve got the “lowest” stock price in a period and not the average, and that’s worth about $85M, when it got essentially converted to shares. As noted by others, there’s nothing wrong with this common practice, as long as it’s properly reported and accounted for.

Leave a Comment