And he never cashed in those options because they were replaced in 2003 by a grant of restricted stock.
Dozens of companies – including United Health Group, Comverse Technology, Vitesse Semiconductor and Affiliated Computer Services – have caught the eye of the Securities and Exchange Commission and the Department of Justice for the timing of their stock option grants.
The question: did these companies backdate options grants – and falsify records – to make them more lucrative for their top employees?
Still, given that (a) backdating helps make earnings look better than they are; and (b) Jobs is a huge shareholder of Apple (10.12 million shares, as of last April), how could he not benefit from this behavior? Jobs recommended some backdating dates for other employees.
It turns out that Jobs did, indeed, receive backdated options—just not at his own direction. 18, 2001, when the stock stood at $21.01, the company gave Jobs a monster 7.5-million-share options grant dated Oct. By doing so, the company gave Jobs $20 million in compensation for which it did not account properly. It also pretended the options grant was approved at a special board meeting, when no such meeting occurred. He received a massive grant that was approved at a phantom board meeting, though he didn't know about the phony meeting.
Basically, a stock option is a contract right to purchase an amount of stock at a set price for a period of time.