Former Apple CFO resigns from board after investigation
Apple announced Wednesday the results of a three-month investigation into the company’s stock option practices, and former Apple Chief Financial Officer (CFO) Fred Anderson announced that he “believes it is in Apple’s best interests” for him to resign from the company’s board of directors.
“I apologize to Apple’s shareholders and employees for these problems, which happened on my watch,” said Apple CEO Steve Jobs. “They are completely out of character for Apple. We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again.”
Apple first uncovered stock option irregularities in June, 2006 — one of many companies during the same time period that was involved in irregular stock option offerings. The company backdated stock option grants to senior executives. Shortly thereafter the company was sued by stockholders. The company delayed filing required financial reports with the U.S. Security & Exchange Commission and ultimately requested a hearing with the NASDAQ stock exchange Listing Qualifications Panel to address the issue. Analysts doubted at the time that the investigation would have much of an impact on Apple’s upcoming product release schedule.
In a statement announcing Fred Anderson’s resignation from its Board of Directors, Apple said the special committee found no misconduct by any member of the company’s current management team. The committee found that the most recent evidence of irregularities related to a January 2002 grant. A total of 15 option grants dated between 1997 and 2002 appear to have grant dates that preceded the approval of those grants.
What’s more, the committee has learned that Apple CEO Steve Jobs himself was aware that favorable grant dates had been selected, but said that he didn’t receive or benefit from those grants and “was unaware” of the accounting implications.
“The investigation raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants. The company will provide all details regarding their actions to the SEC,” said the company in a statement.
Anderson served as CFO from 1996 until 2004, when he yielded his position to current CFO Peter Oppenheimer. In June of 2004, only a few days after he retired, it was announced that Anderson had accepted a seat on Apple’s board of directors.