Al Gore investigating Apple stock options scandal
Posted by Dennis Sellers 
Oct 12, 2006 at 12:53pm
Former US vice-president Al Gore has been asked to help investigate the stock options scandal at Apple, according to the UK-based Guardian Unlimited.
Gore, a non-executive director of Apple, is on a committee charged with looking into how Apple rewarded its leadership. With Gore are former General Motors director Jerome York and Google boss Eric Schmidt, both of whom face possible conflicts of interest.
A probe by directors of backdated stock option grants at Apple. involved two directors who may face options issues themselves, according to The Wall Street Journal . York, also a former chief financial officer of IBM, who was an Apple director responsible for awarding some of the options in question, recused himself from the three-member special committee’s examination for the time he was involved, the article adds. York also recently stepped down from his director position at General Motors.
Schmidt, a new member of Apple’s board of directors, is another member of Apple’s special board committee investigating options who may be caught up in a separate options backdating probe at his prior company. The Journal says Schmidt was CEO at Novell between 1997 and 2001, part of a period that is the subject of an internal probe of possible options backdating issues.
The stock options scandal involves the backdating of stock-option grants to inflate their value. Apple announced that the special committee of its board of directors has reported its findings after a three month investigation into Apple’s stock option practices. The special committee of outside directors, together with independent counsel and accountants, examined more than 650,000 emails and documents, and conducted interviews with more than 40 current and former employees, directors and advisors. Apple initiated this voluntary independent investigation after a management review discovered irregularities in past stock option grants.
The independent investigation’s key findings were:
• The investigation found no misconduct by any member of Apple’s current management team.
• The most recent evidence of irregularities relates to a January 2002 grant.
• Stock option grants made on 15 dates between 1997 and 2002 appear to have grant dates that precede the approval of those grants.
• In a few instances, Apple CEO Steve Jobs was aware that favorable grant dates had been selected, but he didn’t receive or otherwise benefit from these grants and was unaware of the accounting implications.
• The investigation raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants. The company will provide all details regarding their actions to the SEC.
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Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
