Monday, January 08, 2007

Apple's Option Worm

Apple Computer Inc (NASDAQ:AAPL) continues to whistle through the options granting grave yard. An internal probe cleared Steve Jobs in the backdating of stock options. The mantra seems to be he somehow knew about them but did not understand or benefit from them.

But they seem to have slaughtered a sacrificial lamb in the person of Wendy Howell, the former in-house Apple lawyer responsible for option paperwork. According to The Recorder, Ms Howell was quietly let go late last year. Ms. Howell is reportedly the author of fabricated meeting minutes that were used to support the controversial option grant being investigated.

With ongoing federal regulatory and criminal investigations Ms. Howell will probably have a great deal to say as either a defendant and or witness.

If Ms. Howell actually fabricated the meeting minutes and did all that bad stuff, the question becomes why. Why enrich your superiors and endanger yourself career wise and criminally? Corporate culture and internal pressure will surely be a factor. While arguably the top officers may not have financially benefited from the option there is the possibility that senior level hubris, which is measured through wealth, played a directing role in managing circumstances. Executing a relatively minor player seems to be inadequate on a great many levels. It all depends on how you take bites out of the Apple because you want to avoid the worm.