Feeling underappreciated was behind the large stock option grant given to Apple CEO Steve Jobs that resulted in a backdating scandal for the company, according to his testimony to the SEC. Forbes reported Wednesday that the magazine had obtained a transcript of Mr. Jobs's deposition through a Freedom of Information Act request with the SEC, and in that transcript, Mr. Jobs said he was looking for recognition, and that the money wasn't the issue.
Mr. Jobs's testimony was part of the SEC's investigation of then-General Counsel Nancy Heinen, whom the SEC accused of backdating the 10 million option grant to Mr. Jobs. Ms. Heinen eventually settled with the SEC, paid a fine, and was not required to admit any wrongdoing. Mr. Jobs himself was cleared of any wrongdoing.
At issue was the date of the grant. The SEC said that Ms. Heinen falsified minutes of a non-existent meeting of Apple's board of directors, and set the date of the grant back to a time that was more advantageous for Mr. Jobs.
The issues relating to SEC investigations have long been settled, and this week's story from Forbes was intended to offer a look behind the scenes at Steve Jobs through his own sworn testimony. In that testimony, Mr. Jobs said he didn't understand Generally Accepted Accounting Practices (GAAP) rules, and that he went to the board asking for a stock grant because he felt under-appreciated.
"It wasn't so much about the money," Mr. Jobs said in his deposition. "Everybody likes to be recognized by his peers. ... I felt that the board wasn't really doing the same with me. I just felt like there is nobody looking out for me here, you know. ... So I wanted them to do something, and so we talked about it. ... I thought I was doing a pretty good job."
The board agreed and gave him a 7.5 million share grant, but continued negotiation on when the grants would vest resulted in missed filing deadlines and other issues. That, in turn, led to someone at Apple -- the SEC said it was Ms. Heinen -- falsifying records to backdate them to a time that was more favorable to Mr. Jobs.
Mr. Jobs has always denied ordering any of this, and the SEC cleared him of any wrongdoing. Ms. Heinen has also denied doing anything wrong, and aside from agreeing to a US$2.2 million fine, was not required to admit any wrongdoing. Then-CFO Fred Anderson, who is now a managing director with Elevation Partners, which owns a stake in Forbes, also paid a fine of $3.3 million relating to this issue, but also was not required to admit wrongdoing.