Nocera today is "Weighing Jobs’s Role in a Scandal". (The column
is behind the NYT firewall, sorry.) He goes into a lot of detail about the history
of the executive compensation of Steve Jobs, although he doesn’t
mention the fact that, in hindsight, the decisions that Jobs made ended up costing
him a couple of billion dollars. I know, your heart bleeds.
Nocera dwells on the fact that Jobs is ultimately responsible for the backdating
that went on at Apple, yet will probably get away with it – unlike his
former CFO, Fred Anderson, who recently settled with the SEC for $3.5 million.
With all the finger-pointing, it is difficult to parse whether Mr. Anderson,
a wealthy, widely respected figure in Silicon Valley, did something deserving
of government sanction. What is clear, however, is that Mr. Jobs does not
deserve the free ride he’s been getting from the Apple board, the company’s
investors and government regulators.
I am not saying Mr. Jobs committed a crime. What I am saying is that it is
pretty obvious by now that he was extremely involved in both of the options
grants that have become such problems.
Once again, we run into the problem with a rules-based rather than a principles-based
approach to regulation. Because any rules violation must be punished, Fred Anderson
ends up having to cough up $3.5 million, basically for succumbing to the famous
Steve Jobs Reality Distortion Field. Meanwhile, because no one can work out
what kind of rule Jobs broke, he’s considered to be getting a "free ride".
Under a more sensible principles-based approach, the SEC would be charged not
with punishing problems but with solving them. It could crack down hard on people
who deliberately backdated options in order to maximize their own remuneration
while minimizing their tax bill – something which happened a lot. It could
crack down less hard on companies like Apple, where the backdating by all accounts
seems to be much more of a case of cock-up than conspiracy. And it could crack
down a little bit on individuals such as Steve Jobs, who, even if he didn’t
do anything illegal, did show a disregard for the proprieties of running a publicly-traded