The Walt Disney Co. announced that an investigation into stock option practices at Pixar Animation Studios prior to its acquisition has concluded that while options were backdated, no one currently associated with the company “engaged in any intentional or deliberate acts of misconduct.”
The statement is widely interpreted as an exoneration of Disney director and Pixar founder Steve Jobs, though he is not identified by name. Disney agreed to buy the animation company in January 2006 in an all-stock deal valued at $7.4 billion.
Disney also determined that it should address the additional income tax liability that may face Pixar employees who hold such options, including participating in federal and state programs to facilitate paying those taxes on behalf of employees. “The company expects that the impact associated with remedying these tax issues will not be material to the Disney financial statements,” said chairman John E. Pepper Jr., in a statement.
Last November, reported The Wall Street Journal, Disney received inquiries from the Securities and Exchange Commission and the Department of Justice regarding stock-option grants at Pixar.
According to the Journal, top Pixar executives received options priced at the stock’s annual lows in 1997, 1998, 2000, and 2003.
Citing a person familiar with the matter, the newspaper reported that Jobs helped negotiate one individual’s employment contract, which included options priced at Pixar’s annual low. It is still unclear whether Jobs played a role in selecting the grant date, the Journal also observed.
The newspaper also reported that Jobs awarded options to film director John Lasseter that carried the lowest share price of the previous year, attained on a date more than three months before Lasseter’s contract was signed.
In December, Apple Computer — also founded by Jobs, who remains its CEO — announced that its investigation had found that “Jobs was aware or recommended the selection of some favorable grant dates, [but] he did not receive or financially benefit from these grants or appreciate the accounting implications.”