In some cases, the date of exercise, rather than the date of grant, was changed to an earlier date to convert ordinary income into capital gains.
In general, companies engaging in a classic backdating transaction chose a date when the stock price was at a low point and chose that favorable date as the grant date.
(These prices have been adjusted to reflect the subsequent stock split.) Total value: .8 billion." "In other words," he continued, "Steve Jobs missed out on .3 billion in extra profits." Of course, Jobs' 10 million shares are still worth about .5 billion today. 43 wealthiest American with a net worth of .1 billion by .
In 2003, stock options granted to employees "seemed completely worthless," he wrote.
Larger question for investors: If he didn't know, how could the rest of us? When Fortune ran a 2001 cover story (by yours truly) called "The Great CEO Pay Heist", we put Jobs on the cover because the previous year he had received a mammoth grant of stock options that we calculated was worth 2 million, making it the largest one-year pay package any CEO had ever received.
Jobs responded with a letter to the editor, which we published, saying we had made a "glaring error." Those options weren't worth anywhere near what we said.
Stock option backdating has erupted into a major corporate scandal, involving potentially hundreds of publicly-held companies, and may even ensnare Apple's icon, Steve Jobs.
While the focus of the Securities and Exchange Commission ("SEC") centers on improper accounting practices and disclosures, thereby violating securities laws, a major yet little explored consequence to the scandal involves potentially onerous taxes on those who received these options.