Hear, hear.

Alan Murray in the Wall Street Journal (paid subscriber link) has some harsh words for Steve Jobs (“arrogant”, “draconian”) and is rightly dubious of Apple’s protestations of his ignorance in the stock options scandal (the Macalope has held off on using that word, but we can rightly call it a scandal now).

But his conclusion is spot on:

If Mr. Jobs participated in backdating options, he should be punished. To let him off the hook would send a terrible signal that some people are exempt from the rules or above the law.

But 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.

Sing it, sister.

If you read the analysis that’s floating around, it’s generally the mass-market publications that are breathlessly asking “WILL JOBS SURVIVE?!” From what the Macalope’s seen, the Wall Street analysts — the guys who actually have some skin in the game — are long on Jobs.

From Murray’s lips to the SEC’s ears.

The Macalope owns an inconsequential number of Apple shares.

Trackbacks Comments
  • cosmic:

    I think they should cut his salary in half.

  • huxley:

    Not trying to be cute or a smartass, but is it a scandal because some new details have emerged or because the mass media has gone into overdrive reporting the same stuff in the last couple of weeks?

  • For the Macalope, the tipping point was when it was revealed that documents were deliberately filled out with erroneous information (the board meeting that never happened).

    He’s not saying Jobs was involved in the scandalous part, but someone at Apple committed a Bozo no-no.

  • mark:

    That’s the big question – why did someone try to fake this meeting? was it simply to hide the fact that the date was picked in hindsight and then someone realized that the board needed to approve of it on the date picked (which is a plausible explanation)?

    or was something else being hidden? assuming it wasn’t Steve who ordered this, when did he find out about it? when did other board members (or the CFO or the General Counsel, again assuming they did not order it) find out about it? what was done when it came to light?

  • Jody Chen:


    The fact is that, even if Jobs was completely unaware of the entire mess, as CEO it’s his RESPONSIBILITY to have known. I had a somewhat similar discussion a couple years ago on Slashdot, after someone had posted a bitter rant about CEO’s taking the credit for the achievements of a company’s employees (in fact we were talking about Jobs and Apple). I pointed out to him that a CEO, like the captain of a ship, is responsible for the direction and proper operation of the enterprise, and should be credited when his leadership results in favorable results. Conversely if something goes wrong, the CEO, and captain, is the one who should be held accountable. Goes with the territory. It has absolutely nothing whatsoever to do with FAULT, and everything to do with RESPONSIBILITY.

    Even if Jobs’ hands are completely clean (which seems more and more unlikely), it doesn’t give investors much confidence in his skills at corporate governance. In any other company, the board would have already jettisoned the CEO. But Steve Jobs IS Apple. His vision, and his uncompromising, unswerving belief in fulfilling that vision, is the basis of Apple’s resurgence since his return to the captain’s chair.

    Apple is in a tough position, because I’m completely unable to think of a company more bound to, and dependent on, the vision of a single person. The succession issue at Apple is one that I think will become an extremely hot topic in the financial reporting community.

  • Steve Mattan:

    Jody Chen said, “The fact is that, even if Jobs was completely unaware of the entire mess, as CEO it’s his RESPONSIBILITY to have known.”

    Um, no. There is no way for any manager at any level to know everything that the people that report to her or him do, when they do it. They can be held accountablee for two things, how they respond once they become aware so wong has been committed and, if the wrong was not discoverd in a timely manner, why not.

    It was Jobs responsiblity, once he found out, to do something about it. As far as I can tell, it was Apple that launched the internal investigation that led to Apple announcing that they would need to restate earnings.

    I do not know what Jobs’ role in this mess was, and niether do you. Nor do most (all?) of the people spouting opinions. I do not believe that Steve Jobs is an accountant. And, I’m speculating here, if the CFO of Apple told Mr Jobs that what he was doing was perfectly legal, then there was no reason for him to think otherwise. And maybe, just maybe, once he realized what had been done it was Capt. Jobs himself that initiated the internal probe.

    In any large organization there is a point where you have to trust those that work for you. Yes there need to be controls in place to monitor that trust. But to claim that simply because Jobs is CEO he needs to know everything that goes on when it happens is just palin silly.

  • KenC:

    You know, if the board approved the options, then the “false” date doesn’t matter one jot. It’s only if the board didn’t actually approve the options, that the “false” date has any implications. And, it would require more detail before any tipping point is actually reached.

  • Jody Chen:


    I understand what you’re saying, but regardless of what shenanigans occurred on his watch, with or without his knowledge, as the leader he IS responsible. It doesn’t matter if he’s an accountant or not. As I said before, it’s not a matter of fault, it’s a matter of responsibility. If some low-ranking member of a ship’s crew screws up and the ship is involved in a disaster, it’s the captain who gets it in the neck. The captain can’t reasonably be expected to make sure that everyone is doing the job properly, but he had better be damned certain that the job has been done. It certainly is the captain’s responsibility to promote a culture in which the people who report directly to him ARE doing their jobs correctly, and so on down the chain of command. If there was rogue behavior at any level, where was the oversight?

    KENC said: “if the board approved the options, then the “false” date doesn’t matter one jot. It’s only if the board didn’t actually approve the options, that the “false” date has any implications.”

    But the false date is EXACTLY the problem. Falsification of documents is viewed by the government as intent to defraud, and that more than anything is why the pot continues to boil. This entire affair would probably have blown over very quickly with maybe an SEC fine for Apple had it not been for the falsified board meeting dates. That raised it to a new level in the government’s view, and opened up an entirely new box of headaches for Apple.

    No matter what transpires, I do agree with the Journal’s conclusion: any punishment that interferes with Jobs’ ability to run Apple would be manifestly unfair to the company and their shareholders.

Leave a Comment