Apple's Streamlined Options Operation

During a critical period between 2000 and 2001, decisions on stock options grants at Apple (AAPL Quote) were made not by an independent committee of directors but by the company's board -- and potentially, CEO Steve Jobs.

Such decisions at Apple, including who receives options and their grant date, are usually overseen by a compensation committee comprising two to three independent directors. Some Wall Street analysts have suggested that bureaucratic layer is why Jobs won't be implicated in the company's ongoing probe into "irregularities" it has found in options grants made between 1997 and 2001.

"Even in the worst-case scenario where AAPL is found guilty of granting options improperly, we do not believe Steve Jobs is liable," wrote Shaw Wu, in a research note in late June, immediately after Apple first revealed its options problems. "The reason being the compensation committee at AAPL is run by an independent board who are not employees of AAPL."

But that hasn't always been the case. From April 2000 to August 2001, Apple's board didn't have a compensation committee, according to the company's regulatory filings. Instead, decisions about options grants and executive pay were left up to the board itself. ...