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How Jobs dodged the stock option backdating bullet

In researching this post, I came across a number of recent reports on Henry Nicholas III, the once high-flying CEO and cofounder of Broadcom. The allegations of illicit sex, drugs, and rock and roll reminded me of the 60s ... or was it the 70s? Funny, I can't remember.

While the story was enthralling, I didn't understand what any of it had to do with a federal investigation into stock option backdating. Sure, Broadcom had to take a $2.2 billion charge to fix the accounting mess left by the company's former executives. But how does that relate to hiring prostitutes and drugging customers without their knowledge?

Said another way, do the feds really need to dig that deep to find enough rope to hang executives with? After all, stock option backdating is all the rage these days. You'd think they'd be up to their eyeballs in rope.

I count no fewer than 38 top executives at 19 high-tech companies that have bit the dust over this stuff. We're talking top executives at big-name companies like Apple, Altera, Broadcom, Brocade, Cirrus Logic, Comverse, KLA-Tencor, Maxim, McAfee, Rambus, Sanmina-SCI, Take Two, Trident, Verisign, and Vitesse. And we're just getting started.

That's serious fallout considering that options backdating is legit as long as the company reports it and accounts for it accurately. You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted. That means the company incurs an expense equal to the difference in the share price between the two dates.… Read more

E3: 'Wii Fit' gameplay video

Health-conscious gamers can finally put the Wiimote down and put away Wii Sports. Nintendo's upcoming Wii Fit uses the new Wii Balance Board controller to measure how you move as you stretch, dance, and dodge through 40 different fitness activities. Wii Sports is expected to hit stores early next year.

What happens when founding CEOs go bad - the sequel

This is part two in a series on founding CEOs. Part one, in which I did get a bit carried away with a rotting fruit metaphor, proposed that founding CEOs typically stick around longer than they should. It went on to discuss the role and effectiveness of boards of directors in this process.

This post attempts to provide a logical framework for the key conclusions reached in the earlier post. Check it out:

Life is full of obstacles. Sometimes they're external, like earthquakes, competition, or pain-in-the-ass neighbors. Oftentimes we create our own problems. We call that being our own worst enemy. In any case, everyone faces barriers that are challenging to overcome. Sometimes we succeed, more often we don't. That goes for CEOs and companies, too.

This concept isn't limited to human behavior. It happens to animals and plants, even to planets and galaxies. Disease, draught, global warming, and intergalactic collisions are examples. In life there are biological factors, to be sure, but if you go deeper still, you find that the underlying cause is physics - thermodynamics, to be specific. It's called entropy.

Entropy - known in the human world as "s--t happens" - is actually a truth that goes far beyond car accidents and getting caught cheating. It describes an ever-increasing randomness that creeps into everything and can wreak havoc on otherwise organized systems.

Now, let's apply that to CEOs and companies. Executives spend most of their time working to meet operating goals. Time is precious and not much of it is spent anticipating and assessing external and internal strategic threats - that's consultant speak for the s--t that inevitably happens to companies.

While understandable, this means that executives often-times fail to recognize strategic threats or are not able to overcome them in time, i.e. before something bad happens that impacts operating results. That goes for both external events - such as changes to the competitive landscape, and internal issues - like technology development challenges.

Sometimes this is a one shot deal. Fine. Other times the behavior appears to be more systemic. In other words, for whatever reason, the CEO's decision-making or ability to rise to the challenges of office appear to be consistently, or at least often, ineffective. It doesn't matter why, only that it indeed happens, in fact happens to all of us. The only difference is that we are not all in a position to impact jobs, 401Ks, and shareholder value. In any case, boards are supposed to oversee CEO effectiveness and step in when that appears to be compromised.… Read more

Take a stand with 'Wii Fit' and its new controller

Ever since Wii Sports got gamers off their couches and onto the floor in front of their couches, the Wii has been a big deal for health-conscious gamers. The Wiimote's motion-oriented controls keep players active as they swing, slash, and roll in different games. Now Nintendo is taking the next step in making the Wii fitness-friendly, and they're not even using the Wiimote to do it.

At a press conference today, Nintendo announced Wii Fit. Like its name implies, Wii Fit is a fitness game for the Nintendo Wii. Like Brain Age used the Nintendo DS to exercise … Read more

Cut & Carve

Joseph Joseph's Cut & Carve at Delight.com just grabbed my attention this morning, and it seems absolutely brilliant (not to mention gorgeously simply designed, and those subtle spikey nubs to hold the things which may try to slip and slide while you chop and carve - yes, steak, i'm thinking of you...) and at $25 a fun gift for the kitchen gadget lovers on your list. Also, notice that subtle slant, to help you keep those delicious juices which may overflow... or to get the crumbs away from your bread without having them all over your counter? More images after the jump of this low tech kitchen accessory in action with bread, tomatoes, and a close up!

What happens when founding CEOs go bad

Bill Gates is one in a million. Most founding CEOs eventually become a liability that can destroy shareholder value faster than you can say Bernie Ebbers. They're fine for a while, and then, without warning, they go bad on you. Why not just fire them? Good question, but it's not that simple. It almost never is.

For one thing, CEOs don't come with expiration dates stamped on their foreheads. They're kind of like coconuts. Just the other day I cracked one open and it was all moldy inside. On the outside it looked perfect. But coconuts are kind of hairy so it's hard to tell. This one must have had a tiny crack somewhere, so it rotted. Who knew?

Short of cracking their heads open with a hammer and chisel, how do you know if a founding CEO has gone bad? Well, it's up to the board of directors to make that determination. And therein lies the rub. Boards are notoriously squeamish about dumping what was once a nice, ripe executive in the corporate compost heap.

It's ironic, because hiring and firing the CEO is a board's primary function. Didn't know that? That's exactly my point. Boards are so ineffective at it that lots of folks are not even aware that it's their job.

Why is that, do you think? I don't know, but maybe some directors are rotten too. I'm just thinking out loud here, but you know what lots of ex-CEOs do? They become directors of other companies. Are you starting to see a pattern here?… Read more

HP adds two new faces to its board

Hewlett-Packard filled out its boardroom with two new members.

Joel Hyatt, founder of Current Media, and John Joyce, a manging director of Silver Lake Partners private equity firm, will become directors of of the world's largest PC maker, according to a Friday SEC filing.

Hyatt co-founded Current Media, which produces Current TV, with former U.S. Vice President Al Gore. He is also the founder and former chief executive of Hyatt Legal Plans. Joyce was previously at IBM, where over the course of two decades he held the positions of senior vice president of its Global Services division, chief … Read more

Launch your own job board in a heartbeat: JobCoin

When TechCrunch launched its Web 2.0 job board last year, it was joining--and was soon joined by--several other similar job boards. And now, anyone can get in on the action. Using JobCoin, you can create a job board on your own site with practically no effort. The service is a job board host. You tell it how much you want to charge for a posting, upload your logo, and bam, you've got a board. Here's ours: webware.jobcoin.com. (Our current fee for posting a job: $0. Go wild, but keep it clean.)

It's a … Read more

RetirementJobs.com says, 'Over 50? Get a job, punk!'

A job board for people over 50 years old, RetirementJobs.com was created to reflect the changing definition of "retirement" in the United States. And the fact that the older demographic is now online in sufficient force to make the site viable.

According to founder Tim Driver, the supply of older job seekers is matched by a necessary and ongoing reversal in corporate age bias. As a country, we are aging. When a person retires from a job these days, there aren't always two or three people ready to step into the job, as there have been … Read more

The Mario Bros.-Parker Bros. mashup

Remember back in the '90s when that PC-game version of Monopoly was released? I didn't follow its progress too well, but I can imagine that board game enthusiasts were probably up in arms that one of their favorite titles was adopting an electronic form. It must have been like Jedi defecting to the Sith, except for the fact that the Monopoly computer game didn't seem to catch on like its cardboard-and-fake-money predecessor had.

Well, now the reverse is happening. Sort of. Nintendo Monopoly, one of Uncrate's most recent featured products, brings video game characters to a board … Read more