Disney has concluded its review of options grants for Pixar, the Steve Jobs-controlled animation company it acquired, making Jobs the largest shareholder in Disney.
According to the Wall Street Journal (registration required), Disney came to the conclusion that, although there was options backdating at Pixar, Jobs was not involved. A question about his role in Apple's options backdating problems is still being examined by the federal government ,although the Apple board has said that Jobs has been cleared of wrong-doing. It is not clear whether the government will look at the Pixar options.
The announcement by Disney still leaves Jobs in a peculiar position. He served as CEO of two companies that have been involved in the options backdating scandal, he has been cleared by two boards, but his position in government investigations is not clear. It would appear to increase his jeopardy, at least compared to when the investigations at Apple began.
At both Walt Disney Co. (NYSE:DIS) and Apple Inc. (NASDAQ:AAPL), it appears that the boards are not willing to say that the "buck stopped" with Jobs. How the government will see it is another matter.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
3-18-2007 @ 10:15AM
Rick Hanley said...
Stress kills. Jobs is subject to huge stress right now. He's a big name in one of the big scandals of the decade.
None of the internal investigators are completely sure the government has an ironclad case so they would not dare to offend Jobs. The stress could kill him. Not a lot of upside to attacking Jobs at a time like this, in a case like this.
This person, Jobs, made Apple, made Pixar, made himelf the biggest owner of Disney, made the iPod, made the Apple TV, made the Apple iPhone, etc. This is no talking head. This is an innovator and brainiac and marketeriac.
The government has a humongous challenge in figuring out the best way to work through this thing. For all the miscreants whose cases are not cut and dry, what is the right punishment? It doesn’t help to have Jobs in the middle. Defining the path, from beginning to end, is very complicated. The prosecutors run the risk of the whole thing turning into a circus. With the caliber of the attorneys representing Jobs and the other real big shots, the prosecutors have to tip toe through what is best for government, companies and the public.
But, be sure, that the government, unlike the internal investigators, has no leeway in treating Jobs. This is not a simple call made on a sports field. This giant set of cases creates or destroys the credibility of the government. Bush is less able to pull strings to let big business off the hook. The democrats get a full look-see this time around. The republicans can’t screw up if they would like to still be at the table after the 2008 elections. We have additional scandals and disruptions coming down the pike (e.g. the mortgage/housing debacle).
The mood may continue to get darker. Not a good time to be a focal point in a scandal. Oddly, attacks on Jobs could be vicious if he goes down in the backdating scandal. Being a tough guy can go against you. And what if the Apple TV and iPhone are flops?
3-18-2007 @ 2:58PM
jbelkin said...
While we aren't privvy to all the details just yet - it's NOT illegal to get or grant backdated options (just like you can get a retroactive bonus) - it's only illegal to grant it to yourself in secret or some other illegal means (to yourself or others) like faking a board meeting, etc ... but the word 'backdating' by itself is not a criminal act - it might be unethical or immoral but not necessarily illegal.