Options stink lingers for Apple CEO Jobs

SAN JOSE, Calif. — The pending resignation of UnitedHealth Group Chairman and Chief Executive William McGuire provided an inescapable sign that no executive is too big to be toppled by the stock-option scandal — despite having many fans in the boardroom and on Wall Street.

That news could rekindle a question: Is Apple Computer's iconic CEO Steve Jobs truly safe?

"I don't think there is anybody who is too big, too important or too rich to go to jail. That applies to Steve Jobs as well," said Paul Hodgson Sr., a senior researcher for the Corporate Library, which does corporate-governance research. "If he has done something wrong, he has got to go, regardless of the situation."

But, Hodgson added: "I haven't seen enough evidence either way that Jobs is involved or completely uninvolved in this situation."

Trading on Wall Street suggests investors believe Jobs will weather this crisis. After tumbling as low as $50.67 in mid-July, Apple's stock is up nearly 50 percent. Wednesday it closed at $74.53.

So far, the widening national scandal into whether companies rigged stock options to give executives and employees a head start to profits has entangled at least 140 companies, including dozens in Silicon Valley.

This week, four more Silicon Valley executives lost jobs.

Altera Chief Financial Officer Nathan Sarkisian resigned. KLA-Tencor pushed out Director and former CEO Kenneth Schroeder, and General Counsel Stuart Nichols.

Then Kenneth Levy stepped down as chairman of KLA-Tencor on Tuesday.

But UnitedHealth's McGuire is the biggest head so far. Under McGuire's guidance, the Minnesota company's stock climbed more than 50-fold, performance that some investors hoped would insulate him from the scandal.

Like McGuire, Jobs is seen as an integral part of Apple — the visionary who rebuilt Apple into Silicon Valley's fourth-biggest company.

Barely two weeks ago, Wall Street analysts sighed with relief when Apple disclosed that an ongoing internal review had concluded Jobs was "aware of" stock-options abuses but didn't do anything that would force him out.

Apple said it had found "no misconduct" by current managers but did point the finger at two unidentified former executives.

Jobs also apologized for the abuses that "happened on my watch" but were "completely out of character for Apple."

Apple's disclosure left many unanswered questions about Jobs' role and the tainted options he received. Some experts have challenged the company's spin that "he did not benefit," triggering one critic to call for Jobs to cough up $85 million of income.

Shareholders could ferret out evidence they could use against Apple in court. And still looming is the worry that federal investigators could reach darker conclusions about Jobs' role than the company itself, experts say.

Though Apple has yet to detail which of Jobs' two grants were tainted, most of the suspicion has centered on one of the largest grants in U.S. corporate history: 40 million options, adjusting for splits in the stock price, in January 2000.

If Jobs' grant had been pegged to the price on the day he was appointed permanent CEO — rather than a week later when Apple's stock hit a monthly low — his immediate paper profit on the options would have been $168 million less.