Companies don’t change the wording of important regulatory disclosures without some pretty serious soul-searching by the lawyers. So Apple’s amendments today to earlier disclosures about Steve Jobs’ involvement in options backdating amount to a glaring change of stance.

This is the key sentence from Apple’s regulatory filing on October 4th:

In a few instances, Apple CEO Steve Jobs was aware that favorable grant dates had been selected, but he did not receive or otherwise benefit from these grants and was unaware of the accounting implications.

This is the new version of that sentence:

Although the investigation found that CEO Steve Jobs was aware or recommended the selection of some favorable grant dates, he did not receive or financially benefit from these grants or appreciate the accounting implications.

Let’s see now…

1. It turns out Jobs wasn’t only aware of some of the backdating, he "recommended" it.

2. Before, he was said to be "unaware" of the accounting implications: now, he simply did not "appreciate" them.

3. Before, he did not "benefit" from backdated options: now, he did not not "financially benefit." Is this a reference to the fact that, though he never exercised his backdated options and surrendered them two years later, he at least received a notional benefit when they were first issued?

4. Before, Jobs was aware "in a few instances": now, his involvement extends to "some favourable grant dates". How many, and why the change of wording?

Wall Street’s sigh of relief today suggests it believes Jobs’ position is now secure. But in the famous words of former senator Howard Baker during the Watergate hearings: "What did the president know, and when did he know it?"

December 29th, 2006 in Uncategorised | Permalink