Steve Jobs 'outrageous' performance at shareholders meeting
Steve Jobs performance at Apple's annual meeting yesterday was nothing short of outrageous, shareholders charged, as the CEO refused to let a board director answer a question and laughed off a suggestion that he give up restricted stock he received in exchange for backdated options. He said the stock was actually priced too high, but that he is not asking the company to reimburse him.
"Options backdating is a cancer eating away at the company," charged Con Hitchcock, a representative of Amalgamated Bank, while arguing at the meeting for the labor-backed institution's proposal on backdating.
Teamsters representative Noa Oren tried to ask William Campbell, Apple's co-lead director and the head of its compensation committee, about Jobs' pay. But Jobs refused to let Campbell answer, saying the directors who attended were there as guests. "I thought that was outrageous," Oren said.
"It is appalling that he would think that he had a right to interpose himself between shareholders and the board," said Nell Minow, editor of the Corporate Library, a business research and watchdog organization based in Portland, Maine. "That showed very poor judgment on his part," added Minow, who owns Apple shares and voted for the shareholder proposals, but did not attend the meeting.
"It's bad enough that Jobs said that," she said. "`What's really appalling is that none of the directors objected to him saying that. Where were their spines?"
It's well-known that Jobs assembled his board to never challenge his authority. After getting thrown out of Apple in the 1980s, Jobs structured the board on his return to include himself and a majority of his friends. Several board members have financial interests with Jobs and Apple that make it unlikely they would act against Jobs.
Apple directors Bill Campbell, chairman of Intuit; Arthur Levinson, CEO of Genentech; and Eric Schmidt, CEO of Google, who all attended the meeting, were unavailable for comment afterward and did not return calls later.
Shareholders had proposed six non-binding proposals, two of which, related to environmental concerns, were withdrawn at the meeting. The four remaining proposals, although defeated, apparently garnered widespread support among Apple investors. According to a preliminary tally reported by Amalgamated Bank, about 41 percent of shareholder votes were in favor of the proposal to bar backdating. Another 41 percent voted in favor of allowing shareholders to have an advisory vote every year on executive pay at the company. Some 38 percent of shareholder votes were in favor of both forcing Apple's executives to hold on to a large portion of their shares and tying executive pay to the company's performance.
Even though the measures lost, the level of support was "very unusual" and could put the board under pressure to reform.
Amazingly, in response to demands from AFL-CIO representative Brandon Reese that Jobs give back some of the restricted shares he received in exchange for backdated stock options, Jobs said that the options were "approved" by Apple's board in August 2001, but that he didn't get his shares until October, when Apple's stock was about 50 cents a share higher.
"I didn't ask the company to reimburse me," he said.
In point of fact, that October date was made up and fraudulently documented by Apple lawyers. The grant date was actually December, when shares were even higher. The delay from August to December was due to Compensation Committee discomfort with the level of compensation.