The problem is that Jobs is above all a flower of Silicon Valley culture—where options backdating is common.
No doubt, Jobs should be worried by a statement the other day by SEC chairman Chris Cox that when it comes to options-backdating cases, the government would focus on those “cases of serious fraud with elements such as deliberately lying or forging documents.” Yet for all the noise that the options scandal has so far created—more than 200 companies have been implicated to date—the government has brought criminal cases against only five executives. And Jobs can surely take comfort in the obvious waning of the political appetite to prosecute the excesses of the bubble. In Albany, the Spitzer era may be just beginning, but in the realm of financial regulation, it seems well and truly over.
Jobs, of course, is a special case—a kahuna big enough to stir the juices of even the most torpid prosecutor. But taking him on would undoubtedly be a notably fraught endeavor. More than perhaps any other CEO in America, Jobs has made himself indispensable at Apple; to a startling degree, the company is a pure reflection of his brains and sensibility and ego. And that Jobs has purposefully failed to groom a successor has only made him less expendable. According to an analyst at Piper Jaffray, were Jobs to be forced out of Apple, the stock would take an immediate 20 percent hit, a $14 billion whipping—every dime of it on the hands of whatever federal agency was responsible for taking Jobs down. Think such considerations don’t factor in at the SEC? Be serious.
But although Jobs may be indispensable, untouchable he is not. As the past six months have demonstrated, the SEC and the U.S. Attorney have nearly endless means of making a CEO’s life miserable short of filing criminal charges. All of which is why the Gore-York report struck so many observers as such a wasted opportunity. Here you have a situation begging for a mea culpa; for an admission that Jobs made some unfortunate errors, but ones all too common to the era; for an offer to do whatever regulators see fit to make financial amends.
Sorry has never been a word prominent in the Jobs lexicon, however. And in this case, an apology would be especially hard for him to swallow. It would require Jobs to admit not only that he’d done something that was wrong. Even worse, it would require him to admit that he’d done something that was pedestrian.