John Heilemann’s reasoning for why Steve Jobs won’t be taken down for backdating, offered in this week’s New York Magazine, is three-fold.
1.Jobs makes Apple a lot of money.
2.Jobs knows how to titillate (the trademark tease (‘One more thing…’)).
3.Jobs is Jobs.
The first two points seem reasonable enough—Apple’s never claimed to be in it for the children, and everyone knows a company lives and dies by its CEO’s ability to execute good foreplay or not. But the last one left us a little confused. The statement makes sense, mathematically-speaking, we guess. And arguments are always made stronger with a third supporting point, sure. But how is the act of “being” someone a defense in the case of fraud? (We assume Jobs won’t be tried in a court of existentialism but we’ve been wrong on stuff like that before so who knows). We wanted answers, so we decided to finish reading the article. Heilemann’s calculation is this:
On December 29, Gore and York issued a report declaring that they’d “found no misconduct” by Jobs or any current Apple executive. Yet the report stated that Jobs had known about some of the 6,428 options that were improperly dated between 1997 and 2002, and that he had even recommended some of the “favorable” (i.e., bogus) dates. It revealed that he received a 10 million-option grant in January 2000 that was backdated by six days, greatly to his advantage. Also that a 7.5 million-option grant to him in 2001 had been backdated by two months—and that company records were falsified to create the impression that a special board meeting had taken place to approve the grant when no such meeting had ever actually occurred.
Neither Jobs nor Apple is saying anything for the moment beyond what’s in the Gore-York report. And there the defense of the company’s chief boils down to a single bald assertion: Jobs is basically in the clear because “he did not receive or financially benefit from these grants or appreciate the accounting implications.”
Put aside the matter of whether this statement—the first half of which is open to considerable debate and the second beside the point—is, strictly speaking, true. What’s more interesting about it is the way it rhymes with the company’s broader strategy in dealing with the options mess. Over 30 years, Jobs has carefully, famously honed his image as the archetypal un-businessman. As an aesthete, an idealist, a man for whom money was peripheral. And now he and Apple are relying on that image to shield him from imputations of financial chicanery. The thrust of their message is that we should believe that Jobs is innocent because he is … Steve Jobs.
The trouble is that Jobs, above all and before anything, is a flower—maybe the perfect flower—of the Silicon Valley culture. And in the valley during the Internet boom, the backdating or repricing of stock options wasn’t merely commonplace but practically de rigueur. Indeed, upon retaking control of Apple in 1997, Jobs apparently concluded quickly that rejiggering its options was crucial to preventing its best people from fleeing to Internet start-ups. Or so Jobs told Time magazine that August: “To restore morale, Jobs says, he went to the mat with the [Apple] board to lower the price of incentive stock options,” the magazine reported. “When the board members resisted, he pushed for their resignations.”
Insistence on referring to Jobs as “the perfect flower” (or a “flower” at all) aside, we suppose we can say we “got” Heilemann’s explanation. But, truth be told, we still didn’t “get” it. (There are subtle but tangible differences between the two). So we decided to go to the man himself. Let’s just say he broke it down for us in a way more on par with our level of understanding (remember, we’re the people who suggested acquiring hornymanatee.com with your Goldman Sachs bonus).
Us: So, Jobs. People say you won’t get in trouble for backdating because you’re you...what's that about?
Jobs: Let me put it this way: I’m a figure that the public adores. I wear mock turtlenecks—how could you not love me? Sidebar: it’s a little known fact that all of my worldly powers are derived from the small but essential piece of fabric that covers my neck—take it off and I might as well be a cashier at Best Buy or Kobi Alexander, okay? Anyway, it’s like this—would John Hodgman get taken down for insider trading, even if it was plainly acknowledged that he was involved in said pursuit? No, he wouldn’t, because he’s John Hodgman and if you’re going to mess with that roly-poly ball of adorableness, you might as well cut two holes in a white sheet and call it a day. Same thing with me.
Steve Jobs’s Halo [NYM]