Apple investigates share option irregularities


Apple investigates share option irregularities

Antony Savvas

Apple Computer is probing share option awards it gave to employees between 1997 and 2001, including an award to chief executive officer Steve Jobs.

The proble is set to trigger an investigation by the US Securities and Exchange Commission, after Apple alerted the US regulator to its internal investigation.

Apple said it had “discovered irregularities” in the grants. The company said the award to Jobs had been subsequently cancelled and that he had not gained financially from it. It is not clear when the award to Jobs was cancelled.

Jobs said, “We are proactively and transparently disclosing what we have discovered to the SEC. We are focused on resolving these issues as quickly as possible.”

Apple said it would not comment further on the irregularities until an investigation had been completed by an outside independent legal team, which it has hired.

In a separate development, CA announced that it might have to restate its earnings from previous years because of the way it had handled share option grants to employees.

CA said that prior to fiscal year 2002 it “did not communicate stock option grants to individual employees in a timely manner”.

There were delays of up to two years between when grants were approved and when they were notified or given out.

A number of US technology companies have been under investigation recently for the way they handle grants of share options. After approving such awards, they had released the shares at a later date, when the share price was lower, so the recipient could buy exercise their options more cheaply.

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