IS APPLE Computer CEO Steve Jobs an untouchable? Will he get away with doing bad things just because he is too important to sacrifice?
Those are questions Business Week explores in a probing article that looks at whether investigators at the Securities and Exchange Commission will have the spine to take on one of the most iconic figures in American business.
“The backdating scandal has been rumbling along for months now, claiming numerous high-profile victims,” writes the magazine. “The involvement of Jobs, though, raises the stakes to a whole new level.”
Based on the information the company’s special committee has provided, the case against Jobs is clear. He did wrong, even if the committee couldn’t stomach to say as much. And while much is made of Jobs not benefiting financially from the backdating, it’s the same as saying someone who botches a bank robbery has done nothing wrong because they didn’t get away with any money.
Business Week says some legal and pay experts see a different standard being applied in how Apple is dealing with Jobs than how other CEOs have been treated for similar or less serious offenses.
The article makes a very good argument for why Steve Jobs is vital to the success of Apple, and why he shouldn’t be forced out of the company. There’s no doubt about it. Steve Jobs is hugely important to Apple, and perhaps he does not need to leave the company.
But his case is even more important to America, and indeed the entire world’s confidence in the integrity of the U.S. capital markets. Special treatment for Jobs will send the wrong signal — a confirmation, some might say — to investors around the world that the U.S. system is corrupt.
Dwindling trust premium
Already, the U.S. markets are losing out to other financial centers like London, and even Hong Kong. This is not simply because of costly and complex U.S. regulations and litigious shareholders, as the business lobby and its committees have claimed.
It is also because much of the valuation premium of a U.S. listing — the “trust premium” — evaporated with Enron, WorldCom and the more recent options backdating scandals.
Companies thinking of listing in the U.S. are asking themselves why they should put up with additional red tape and expenses if they’re not going to be rewarded with a premium valuation. It’s not only the risks of a U.S. listing that are driving companies away, but also the lack of a reward.
America’s dwindling trust premium needs to be staunched. That means restoring trust and confidence through transparency and enforcement.
Steve Jobs may be indispensable to Apple Computer, but not so to America. Dealing fairly and evenly with Steve Jobs, as they would if his name was Joe Schmoe, is the only path regulators and prosecutors dare take.