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Facebook's turmoil has reportedly hit employee morale hard
Facebook has been mired in bad news lately, including numerous data privacy scandals, criticism over its role in Myanmar violence and a tumbling stock price. As such, employee morale has fallen, with just 52 percent of employees saying they're optimistic about Facebook going forward, according to the Wall Street Journal. That's down from 84 percent a year ago, meaning a third of Facebook's employees think the company's future is less than rosy than they did in late 2017.
Elon Musk may have violated US labor laws during tweet storm
When Elon Musk had a twitter meltdown a few days ago in response to bad press about Tesla factory safety, he may have actually said something illegal. According to Bloomberg, the United Auto Workers union is asking a federal labor board to investigate a tweet by Musk that could be interpreted as threatening to take away stock options if employees join a union. It's illegal for an employer to threaten retaliation for organizing.
Apple's board modifies Tim Cook's 2011 stock award to be based on performance
According to a filing Apple made with the SEC on Friday, Apple's Board of Directors decided to adjust Tim Cook's compensation package as it pertains to his stock options. When Cook became the CEO of Apple in August 2011, he was awarded 1 million restricted stock units, half of which are scheduled to vest on August 24, 2016, with the other half slated to vest on August 24, 2021. Of course, in order to claim said shares, Cook must remain employed by Apple throughout each vesting date. With the updated SEC filing, Cook's stock compensation will now be based, in part, on the company's performance. Apple's SEC filing reads in part: In outreach discussions this year with many of our largest shareholders, we heard that they believe it is appropriate to attach performance criteria to a portion of our future executive stock awards that have been entirely time-based (i.e., vesting for continued service) in the past. We agree and, beginning today, the Company will include a performance element in new stock awards to our executive officers. CEO Leadership by Example Mr. Cook is leading this initiative by example and has the full support of the Board of Directors. He asked the Committee to apply a performance metric to his outstanding 2011 CEO equity award as well as any potential future awards. After careful deliberation, the Committee has approved a modification to Mr. Cook's 2011 award. Under the adopted modification, Mr. Cook will forfeit a portion of the 2011 CEO equity award, which was previously entirely time-based, if the Company does not achieve certain performance criteria. While the Committee generally believes that a performance-based award should have both a downside and an upside component, at Mr. Cook's request, the modification does not contain an upside opportunity for overachievement of these criteria. As a result of implementing a modification with only downside risk, the Committee has determined that a portion of the original grant should vest earlier than originally scheduled. So just how will the Board of Directors measure Apple's performance under the helm of Cook? Well, the SEC filing notes that the Board consulted with shareholders and compensation experts and ultimately concluded that they'd measure Cook's performance as CEO by measuring the company's "total shareholder return" (TSR) as compared to other companies. With the modified plan in place, Cook will now receive 100,000 shares in 2016 and an additional 100,000 shares in 2021. The remaining 800,000 shares will then be divided up into 10 installments of 80,000 that will vest each year since the award was initially granted in 2011, assuming of course that Apple's annual performance is up to snuff with the TSR of the S&P 500. The relative TSR criteria will be applied to each 80,000 RSU tranche scheduled to vest on each anniversary of the original August 24, 2011 grant date, and will compare Apple's TSR to the TSR of the companies in the S&P 500 using public data derived from Standard and Poor's. If Apple's performance is within the top third of that group, the RSUs in the tranche for that year will vest in full. If its performance is in the middle third, the RSUs in the tranche for that year will be reduced by 25%, and if its performance is in the bottom third, the RSUs in that tranche will be reduced by 50%.
RIM's co-CEO Balsillie stepping down from board as part of backdating settlement
Remember that settlement RIM reached with the Ontario Securities Commission yesterday? Well, details of the arrangement have emerged, and Reuters is reporting that in addition to over $90 million CAD being repaid, the company's co-CEO will be stepping down from its executive board as part of the deal. Jim Balsillie will reportedly have to fork over $5 million CAD (~$4.1 million USD) and his position on the board for at least 12 months -- though we're not sure if he intends to return (or if he'll be welcomed back). [Via BlackBerry Cool]
RIM reaches settlement with Ontario Securities Commission over backdating shenanigans
Gearing up to close another chapter in its tale of cooked books, RIM announced this week that the company and "certain of its officers and directors" have reached a settlement with the Ontario Securities Commission over backdating stock options. Those certain officers are more than likely co-CEOs Jim Balsillie, who also serves as a director, and Mike Lazaridis. Both men were fingered in a report last month that suggested the commission would seek a record-breaking $100 million fine. The deal is still subject to approval by a panel of OSC officials, who are scheduled to meet on Thursday. No word on what penalties they'll incur, but we'd be surprised if RIM didn't manage to skirt at least some of that record-breaking amercement.
Apple settles options backdating lawsuit
The Associated Press reports that Steve Jobs and other senior executives have settled a stockholder lawsuit claiming they mishandled stock option awards. Insurers representing Jobs and Apple's board will pay Apple, Inc. $14 million, which tidily covers almost $9 million in attorney's fees and expenses. The settlement puts to rest a series of suits related to Apple's options backdating scandal. Apple had no comment on the matter. The settlement and the suit behind it is a little complicated: In a traditional stockholder lawsuit, the stockholders must prove that the stock price was negatively affected by the actions of the defendants. Since accounting problems that follow options-backdating scandals frequently don't affect stock price, the lawsuit is called a "derivative lawsuit." In a derivative lawsuit, shareholders sue company leaders individually on behalf of the company, claiming they caused harm to the company's interests. The executives settled with Apple and its shareholders, offering the $14 million in exchange for dropping the suit. The money comes from the insurance companies, as the executives had policies in place to cover them in case they had to pay up. Got all that? There's a test at the end. The settlement received preliminary approval in Federal district court on Monday. A final settlement hearing is scheduled for October 31. [Via Valleywag.]
Apple, Jobs face new options backdating lawsuit
In another chapter in the scandal surrounding Apple's choice to back-date options granted to key executives (including Steve Jobs), two plaintiffs have filed a class-action lawsuit in federal court against two former executives and members of Apple's board of directors. Apple was sued similarly in 2007 by the New York City Employees' Retirement System, and the case was dismissed. The suit names Steve Jobs, former counsel Nancy Heinen, and board members William Campbell, Millard Drexler, Arthur Levinson, and Jerry York. It contends that the accused intentionally filed false documents, hiding stock option grants to the higher-ups. Apple, in an internal investigation, cleared Jobs of any wrongdoing, leading many to speculate that the company threw Heinen and former CFO Fred Anderson under the proverbial bus to protect the company's image. [Via Macworld.]
Another Apple shareholder files backdating lawsuit
After the SEC more or less cleared Apple of those pesky backdating charges and a California court dismissed a shareholder class-action lawsuit accusing the company of improper accounting procedures, it looked like the good times were over, but fear not: another institutional investor has filed suit against Apple alleging the company cooked the books. The Boston Retirement Board filed suit in the Santa Clara County Superior Court, saying that it has investigated the matter and turned up even more evidence, which it can't reveal until the court decides how to handle confidential information. All it will say is that it has proof that "all of Apple's directors were aware of and participated in the backdating scheme," which isn't really new news -- and we're wondering what new information could have turned up that the SEC didn't find in its lengthy, much-watched investigation. Still, it looks like this is the story that won't go away -- anyone ready for some more hot accounting nights?
Apple options-backdating shareholder lawsuit dismissed
The twisted tale of Apple's backdated stock options drew closer to its final chapter today, with a California judge dismissing the shareholder class-action lawsuit against the company over the allegedly improper accounting procedures. Unlike the SEC, which essentially cleared Apple, the court didn't rule one way or another on the actual backdating issue, but instead found that since Apple's stock price didn't suffer, there was no injury to the shareholders, and thus no basis for the lawsuit. That ruling leaves the door open for a second, amended lawsuit to be filed as part of another proceeding, but for right now, it looks like the only real fallout from the whole mess was the birth of Fake Steve -- and for that, we're not sorry one whit.[Via AppleInsider]
Steve Jobs subpoenaed over stock option backdating
It's not easy being Steve Jobs. When you're not jet-setting around the world, introducing your disappointing EDGE-only iPhone to the European market, you're getting subpoenaed by US securities regulators over a lawsuit concerning stock option backdating. According to reports, El-Jobso has been called in for the US Securities and Exchange's case against former Apple general counsel Nancy Heinen over backdating option grants to Jobs and other executives. Apparently, Heinen is looking for 45 depositions for the case, though the SEC is hoping to limit that to 12 (per party). SEC lawyers are claiming that Heinen and former Apple Chief Financial Officer Fred Anderson (of Elevation Partners fame) backdated more than $20 million in stock options in 2001 for Jobsy, themselves, and other executives. Anderson -- who's already paid $3.5 million in fines -- claims he was given permission by Jobs himself to backdate the options. An internal Apple review claims it found two questionable stock options awarded to Jobs, but found no wrongdoing on his part. For Jobs' sake, let's hope he stays out of the slammer -- a pretty face like that won't last long on the inside.[Thanks, Randall]
Apple "not going to enter a public debate with Fred Anderson"
In a remarkably candid and defensive statement issued today by key members of Apple's board of directors (including Eric Schmidt and Al Gore -- heard of 'em?), apparently, "We are not going to enter into a public debate with Fred Anderson or his lawyer." It goes on to say:"Steve Jobs cooperated fully with Apple's independent investigation and with the government's investigation of stock option grants at Apple. The SEC investigated the matter thoroughly and its complaint speaks for itself, in terms of what it says, what it does not say, who it charges, and who it does not charge. We have complete confidence in the conclusions of Apple's independent investigation, and in Steve's integrity and his ability to lead Apple."Kind of sounds like Steve just wrote it on his iPhone and sent it on over, right? Anywho, no real updates from the SEC since yesterday's allegations that Steve was behind the whole backdating scandal, but it looks like Cupertino Co. are getting off without sanctions and Jobs still lies in legal limbo for the time being, despite Apple's wholehearted support of their Jobs-in-Chief.
Apple CFO Fred Anderson settles for $3.5mil
Well, it looks like the stock options issue that has been pestering Apple for months now may be over. AppleInsider is reporting today that Apple's CFO Fred Anderson has settled with the Securities and Exchange Commission to the tune of three and a half million bucks. Mr. Anderson denies any wrongdoing in the settlement.Ok, now that all of this is (probably) over, let's re-focus on Leopard, shall we?
Jobs/Pixar cleared of backdating issues
Well, it seems that all of this may blow over...at least for Steve and the Pixar execs. Late last year, Pixar, Steve's other company which he sold to Disney, was forced to take another look at some accounting actions. One of the suggested possibilities was that Pixar's John Lasseter was given a backdated stock options bonus. This past Friday, however, Disney announced that all of the accounting in question took place before Disney acquired Pixar, and that no one currently involved with the company "...engaged in any intentional or deliberate acts of misconduct."We don't know where this will all end up, but it looks like Uncle Steve is off the hook as far as Pixar is concerned.
Steve in trouble over stock options deal?
There's some more news today on the stock options story. According to AppleInsider, it has been suggested that Steve gave Pixar director John Lasseter a questionable, backdated stock option bonus. I must admit that I haven't really paid much attention to this story, mostly because it's still speculation and hearsay at this point. So we'll see where it goes. For now, though, it's still news.
Stock Options continue to haunt Apple
With the Macworld keynote still on the horizon, the last thing Apple needs is a few more lawsuits and federal investigations. The San Francisco Chronicle reports that Apple faces a new shareholder lawsuit along with twin investigations by the San Francisco's US Attorney's office and by the Securities and Exchange Commission. Apple's internal investigation, led by movie star, former Veep and all around green guy Al Gore, cleared Steve Jobs and his executive team. Apparently the lawsuit names about a dozen complaints including backdating stock options and "spring loading", where options are granted in advance of releasing news likely to drive up prices. The bottom line is that this controversy looks like it will be around for a while longer. Is there a "there" there? It's hard to tell. We're not lawyers and this whole thing looks like it rests on lots of technicalities.
Class action lawsuits filed against Apple
Just when you think Apple's financial woes have begun to recede, Forbes.com alerts us to a slew of recently filed class action lawsuits that all have the big fruit in their sights. First up is yet another complaint alleging that Apple has created a monopoly by tying iTS purchases to the iPod and only the iPod. Even though suits like this have come and gone, the court has interestingly denied Apple's motion to dismiss. Next in line is a suit over the MacBook's iBook G4's "abnormally high rate" of logic board failure. This suit was filed Nov. 7th, and Apple still has time to respond. A third suit is coming from PhatRat Technology LLC, who is calling patent infringement on the Nike+iPod product. A response from Apple is still pending here as well. Last (though possibly not least?) is a securities class action suit against the company and "certain current and former officers and directors" over all this backdated stock option grant business. That's about everything Forbes has on the Apple lawsuit list for now. Think it's still worth it to wish Apple a happy new year?
Apple faked files in Steve Jobs stock options scandal
It seems that the scandal related to Apple backdating stock options has gotten a little more serious. According to the Financial Times, in 2001 Steve Jobs was granted 7.5 million stock options without the proper authorization of Apple's board of directors, and it now appears that someone falsified board meeting records to make it look as if Jobs had received authorization for the grant. The Securities and Exchange Commission is weighing whether to take action against Apple and/or any of the individuals involved, though whether Jobs himself might potentially be in any legal hot water is unclear. Jobs returned all granted options to Apple before exercising them, which perhaps explains why the company issued a statement in October saying that an internal investigation had cleared him of any wrongdoing (the company did force a former CFO from its board). Whether the SEC decides to go after Apple, Jobs or anyone else at the company remains to be seen, but the FT notes that plenty of other CEOs have resigned in the wake of similar backdating scandals. You could argue that given how well Apple's stock has done over the past year that even shareholders who feel cheated by what happened would rather own stock in a company helmed by Jobs than one without him, but rules are rules and if turns out that anyone at Apple broke the law it's unlikely that the Feds will go easy on them. [Thanks, nightryder21 and todd]
Stock options investigation delays Apple SEC filing
Apple's ongoing investigation into its stock option grants has delayed its SEC 10-K filing. The filing, which was due yesterday, may be delayed for as much as a month. If you recall, Apple admitted that employee stock options may have been been backdated. Companies use backdating in order to lower the apparent value of the issued stocks. Although news reports suggest this isn't illegal, the backdating has to be accounted for and disclosed to investors and so forth. CEO Steve Jobs was reportedly aware of the backdating and Apple's investigation is ongoing.
Apple's ex-lawyer retains her own lawyer
Nancy Heinen, Apple's former general counsel who was just replaced by Donald Rosenberg, has retained a Berkley white collar crime lawyer just in case she needs to defend herself against charges resulting from the whole messy options backdating problem. Heinen abruptly exited her post at Apple last spring with no explanation given and neither Apple nor Heinen has bothered to elaborate on what exactly went down or even whether she was fired or resigned on her own.Heinen has hired Cristina Arguedas of Arguedas, Cassman & Headley, who said in an interview last week that federal authorities have not contacted Heinen about her possible role in Apple's option grants and Miles Ehrlich, a lawyer at Ramsey & Ehrlich. "Every executive, CEO, CFO, general counsel, any high-up person in Silicon Valley in their right mind is getting themselves legal representation because of this legal environment right now," Arguedas said. "I have a number of clients who are executives who think it would be a good idea to be represented. It doesn't mean anything that they have chosen me to do that." Fellow TUEWstress Erica Sadun discovered that Cristina Arguedas, aside from being Apple's ex-lawyer's lawyer is go-to-lawyer for lawyers in general, according to the Wall Street Journal law blog. In addition to defending Nancy Heinen, she has also defended legal eagle Ann Baskins, Hewlett Packard general counsel, among others. Is there a special Counsel the Counselors class in law school we wonder?More than 90 companies are the subject of stock option inquiries right now. The FBI said Wednesday that it's investigating 45 backdating cases, while prosecutors in the past three weeks have charged five former executives of two companies, including two ex-CEOs. Sounds to me like Heinan is very wise to retain counsel at this stage of the game.
Apple may restate earnings as far back as 2002
I'm no stock market maven, but something tells me this isn't good. It would seem that Apple's internal audits have found some 'irregularities' in the way the company handed out options. It boils down to mispricing, I believe, so that people could avoid paying huge taxes on their options.Apple has postponed filing with the SEC and may restate earnings going as far back as September 2002. As of this posting it looks like Steve Jobs isn't involved with this, but that still doesn't make the situation a good one. If you want to hear from someone who knows what they are talking about read this post on our sister blog, Blogging Stocks.
