Jobs jabs back at shareholders

Apple Inc. CEO Steve Jobs jabbed and dodged his way through several rounds of shareholder questions during the company's annual meeting Thursday, defending the Cupertino tech company against activists who challenged its environmental record and those who questioned his pay and his role in a stock-options scandal.

Famous for taking a $1 salary -- along with tens of millions of dollars in now-questionable stock options -- Jobs, in his trademark black turtleneck and jeans, quipped: "I get 50 cents just for showing up and the other 50 cents is based on my performance."

When pressed to explain one of the most controversial grants he received, Jobs retorted that Apple actually owes him money on the deal because the stock options had been priced higher than when the board approved them. But, he said, "I'm not asking the company to make good on that."

The annual meeting reflected both shareholder frustration and devotion toward Apple and its iconic leader. Jobs has led the maker of iPods and Macintosh computers to an extraordinary string of successes in the digital revolution. But he has also been accused of ruling Apple with an iron fist, prompting shareholder proposals Thursday aimed at changing some of the company's compensation and corporate governance polices.

Con Hitchcock, representing shareholders from Amalgamated Bank's LongView Funds, called the stock-options scandal "a cancer that has been eating at the company."

"How is it that a company that is so smart, so innovative and so pioneering with its products can be so clueless with these compensation issues?" Hitchcock asked.

His and other executive compensation-related shareholder proposals, opposed by Apple's board of directors, were rejected Thursday. But they nevertheless saw a rare strong showing of support.

In one proposal, giving shareholders a say in executive compensation, 41.3 percent voted in favor and 47.2 percent were against. Another, demanding that the company adopt a stock-options backdating policy, drew 41.2 percent in favor and 45.7 percent against, according to a shareholder representative who made one of the proposals. Apple did not respond to a request to confirm the numbers.

Shareholders also re-elected the board despite a call by an advisory firm, Institutional Shareholders Services, to withhold votes to send a message that the directors need to be more open about how they managed the company's stock-options problems.

Jobs and three top Apple executives took the stage for questions after the formal business of the shareholder meeting ended.

Jobs was both dismissive and jovial as he fielded the majority of the investor questions, often drawing cheers and applause from the audience.

Although several members of the board -- which he called "phenomenal" and "one of the best in the world" -- were present, Jobs declined to let them answer questions. In attendance were Intuit Chairman Bill Campbell, Genentech CEO Arthur Levinson and Google Chief Executive Officer Eric Schmidt. Absent were former Vice President Al Gore, J. Crew CEO Mickey Drexler, and Jerome York, CEO of Harwinton Capital Corp., an investment firm.

Playing prominently were the actions taken last month by the Securities and Exchange Commission, which charged two former Apple executives, Chief Financial Officer Fred Anderson and general counsel Nancy Heinen, with mishandling options by giving them a better price at an earlier date without properly accounting for them.

The SEC settled with Anderson, who then accused Jobs of knowing more about the accounting implications of backdating than he has let on.

Jobs called Anderson a "good guy" but said that Anderson was wrong. Jobs then read an SEC statement -- twice for emphasis -- that said it did not plan to pursue charges against the company and applauded its cooperation.

"Unless you believe there's a conspiracy involving the SEC, too, I don't know what else to say," Jobs said. Or possibly a little something under the table.....

http://www.sfgate.com/cgi-bin/article.cgi?file=
/chronicle/archive/2007/05/11/BUG7HPP0DA1.DTL&type=business