Settlement in Apple executive stock options suit

Stephen Withers
Friday, 12 September 2008 08:28

IT Industry - Listed Tech

A $US14 million settlement should bring to a close the lawsuits concerning backdated stock options granted to Apple executives.

In 2006, Apple disclosed that it had backdated thousands of grants of stock options to executives during the preceding decade. That practice - which involves linking exercise prices to earlier and lower stock values - is legal, if properly accounted for.

But it seems Apple failed to properly record the transactions. Multiple suits were brought in various jurisdictions against the executives, and the cases were subsequently aggregated.

Among the defendants were CEO Steve Jobs, CFO Peter Oppenheimer, COO Timothy Cook, former CFO Fred Anderson, and former general counsel Nancy Heinen.

The $US14 million will be funded by insurers, not Apple or the individual executives.

The settlement also requires Apple to address corporate governance issues as well as making changes to the way it grants and records stock options and related matters.

This week, the judge hearing the case gave preliminary approval for the proposed settlement, with a final hearing scheduled for October 31.