Steve Jobs: Nobody Loves Me

In Pictures: Steve Jobs Speaks

Steve Jobs, adulated gadget hero, was feeling underappreciated not too long ago.

Steve Jobs, the man rolling out iPods, iPhones and cool computers to millions of adoring customers, once felt he wasn't getting enough respect--from his own board of directors. That, at least, was what he told the Securities & Exchange Commission while explaining his actions in the Apple option-backdating scandal that broke in 2006. The scandal, which was part of what caused Apple then to take an $84 million earnings writedown, raised questions about whether Jobs had helped set advantageous grant dates for options for himself and other executives.

The famously private, secretive Jobs, 54, who was treated in 2004 for pancreatic cancer, has been out since January on a medical leave originally attributed to a hormone imbalance. Questions about his health and ability to return full-time--in June, Apple ( AAPL - news - people ) says--occasion much Silicon Valley gossip, especially among investors who consider him the main reason for the company's 1,000% stock rise since 2001.

SEC lawyers grilled Jobs last year as part of a backdating lawsuit against Nancy R. Heinen, Apple's ex-general counsel and Jobs' longtime colleague. Without admitting anything, she paid $2.2 million to settle charges that she had backdated option grants for Jobs, herself and others, and ginned up bogus paperwork to hide the backdating, including minutes of a nonexistent Apple board meeting.

After a Freedom of Information Act battle, this magazine got a copy of Jobs' sworn examination. (Although Jobs and Apple were part of a separate shareholders derivative suit settled for $14 million, both avoided litigation.) The 119-page deposition, taken on Mar. 18, 2008 at Apple's Cupertino, Calif. headquarters, offers a rare look at Jobs in his own words.

At some point in 2001 Jobs went to his board and asked for a big option grant. In the deposition Jobs said he had simply wanted a pat on the back. "It wasn't so much about the money," The Forbes 400 member told an SEC lawyer. "Everybody likes to be recognized by his peers. ... I felt that the board wasn't really doing the same with me." With all of his prior stock options underwater from the dot-com bust, "I just felt like there is nobody looking out for me here, you know. ... So I wanted them to do something, and so we talked about it. ... I thought I was doing a pretty good job."

Wouldn't it have been nice, he was thinking, if the board had come to him and said, "'Steve, we got this new grant for you,' without me having to suggest anything or be involved in anything or negotiate anything. ... It would have made me feel better at the time."

Jobs testified that the board had approved an option on 7.5 million shares at an August 2001 meeting, when the share price was $17.83, but that he had continued to argue with directors about whether the options should vest immediately or over a staggered schedule. The debate helped cause Apple to miss deadlines for filing notifications with the SEC and its own auditors.

On Dec. 18, 2001, according to the SEC, Jobs and the Apple board finalized the terms of the grant to Jobs. Apple's price (not adjusted for subsequent splits) was now $21.01, but, the SEC said, the grant was backdated to Oct. 19, when the share price was $18.30. The earlier date put him $20 million ahead. Jobs later swapped the options for restricted stock of lesser value.