Apple's above the law attitude

As someone who had plenty of dealings with "former Apple executives" I cannot pretend to be surprised at the current brouhaha about the faked Apple stock option documents. There's a much bigger problem. It is that Apple still has a number of executives who have acted over the years as if they are above the law.

I once had a conversation with an Apple vice president who has since left the company with millions in options. I was suggesting that he needed to do what was right and legal.  He replied to me that he was a very important and extremely busy man and would do exactly what he pleased.  Which as far as I could tell was leave the company with millions of dollars of money which he did very little to earn. He was, however, a big buddy of Steve's.

Then there was the case of the vice president from hell that I faced in summer of 2003. He did any number of things which if they weren't illegal, were certainly immoral and against company policy.  As he was trying to explain a clearly unfair compensation plan, I watched as HR spent their time not trying to correct the errors, but trying to spin them and change policies to suit his warped mind.  It got so bad that I went to the vice president of HR (another departed executive).  I was told simply that "Apple vice presidents have the right to make mistakes."

My favorite example has to be my last compensation agreement which stated that I, as director of federal sales, and my team would be paid on all Apple sales to federal customers.  In February of 2004, one of our reps heard another non-federal rep bragging that he was bringing in the Army and a federal contractor for an executive briefing.  Of course you don't do executive briefings without executives involved.  It turned out that some current Apple executives had decided that they were going to make this federal business non-federal so they wouldn't have to pay my  team commission on the  multi-million dollar sale.  Apple even tried to force feed the purchase order into the system with sales tax included so that it would look like a non-federal sale.  Unfortunately the federal government is pretty particular about that, so the order had to ship with no sales tax.  That didn't mean that Apple ended up declaring the sale federal.  All those executives are still at Apple.

It seems that Apple is trying to put the spin on this story that it is all about departed executives.  Well it's a good time of the year to believe in fairy tales, but the climate of being above the law is well ingrained in Apple executives. I can still remember Apple bringing in a whole team of new executives from Adobe.  They were all under forty and replaced people including my boss who were well over fifty.  My boss went from being the head of business sales with over sixty people reporting to him to having only my team of just a few people.  The younger person who replaced him was clearly less competent.  He spent a year figuring out which direction was up.  My boss was eventually put into a position which had lots to do but no people with which to do it.   That this happened to someone in his late fifties is no surprise at Apple or even any technology company.  Certainly Apple isn't the only company to pull stunts like this, but just because other companies do it doesn't make it legal at Apple.

Then there was one of my last acts, which might have contributed to my exit.  A senior system engineer reported to me a conversation that he had with a vice president (still at Apple).  The vice president told him that Apple was going to hold back some billings in order that their next weaker quarter would look better.  Being a director of a publicly held corporation, I reported this to HR and requested an investigation.  Less than a month later I was no longer working for Apple.

Anyone that thinks that Apple's problem with executives believing that they are above the law has disappeared with departed executives will likely believe almost anything that comes out of the Apple spin machine. 

So I suppose you have all heard the rumor that Steve drives a big black Mercedes with no license plate and has enjoyed parking in handicapped spaces more than a few times.

Comments

[Juan de Dios Santander Vela]

Something Jean Louis Gassèe seemed to understand: “Oh, I never thought those parking places were for the emotionally handicapped”

[michael]

No one can be surprised by these turn of events at Apple. The arrogance that emanates from Cupertino staggers the mind.

They keep products under wrap. Does anyone outside of Cupertino know what products will be launched and when? And, if anyone from Cupertino does reveal this information, they will be fired.

Apple treats its customers (i.e., retailers and consumers) like fecal matter.

I cannot imagine any publicly traded company behaving as badly or as secretly as Apple. How can a company with a corporate culture so Politburo like actually succeed?

[Ed]

Wow, that's impressive stuff. But it's hardly something that only Apple execs do. After all, these guys (and they are always guys, right?) probably spent time at other companies before and after Apple. You think any other big US company is any different?

It sounds dismissive to say it, but this behavior is "the American dream." It's really what we've collectively decided is the definition of success--we see it in athletes, movie and music stars, and we see it in corporate executives.

Look: the secretary in your story was right: contemporary American business culture *does* give these guys the right to "make mistakes", i.e. "break the law." Everything about corporate culture is set up to nurture these beliefs and this behavior. There are no consequences, man! We insist that "risk" is honorable, and we reward people for skating right off the edge of it. Accountability does not exist, aside from some trivial fines they might have to pay; more like a little tax than anything else.

I'm not saying that what Apple's done is ok, or that as a customer and fan I'm pleased about it. I'm just saying: in the bigger picture, Apple's just a tiny little dot on the face of the problem.

[ocracokewaves]

I have said many times that I assume that other companies have similar behavior or Dilbert wouldn't have such a great following.

http://dilbert.com/comics/dilbert/archive/dilbert-20061225.html

However, having said that I think Apple's corporate culture is worse at least on the sales side. It's dominated by cronyism on a scale I haven't heard about in other companies.

I know of a current Apple vice president who told one of his managers that he was going to put him on a plan and that there was no way the manager was going to be successful on the plan so he should count on six weeks from that day being his last day. The manager complained to HR so said that the manager was a difficult one to get to follow the rules. He lost his job just as the vp like the vp told him.

I am sure the vice president will replace his ex-manager with another of his Oracle buddes. Parts of Apple are becoming an Oracle retirement center.

I totally agree with you Apple is just a small part of a huge problem, but let's not ignore that this is potentially a huge problem for Apple sometime in the future.

I've made comments about the larger problem in the post below.

http://viewfromthemountain.typepad.com/david_sobotta_weblog/2006/10/change_under_pr.html

[Stephen]

The year was 2003, and I'm Living in the City just like Stevie Wonder sings it.

Diamond Heights and the Noe Valley, I usually would motor down I280 to Apple HQ in Cupertino a few times a week when I'm not on the road seeing Federal customers. Usually takes about 32 minutes going down, and about 40 coming back, given the traffic around I280/101 around San Bruno.

Being a practical man, I've been driving a late model Honda Accord sedan.

Being a single idiot, driving by BMW of San Francisco, one day I notice a very sharp M3 Convertible with exceptionally low mileage, and in superb condition.

No surprise, given the post dot-com era, that there was a glut of slightly used high end vehicles crowding the used car lots of San Francisco and Silicon Valley.

Now, let's set the stage for a moment. Summertime in San Francisco, I'm spending my weekends running around Napa/Sonoma and playing golf at all the Clubcorp properties. The Honda Accord is not exactly the ideal "Pimp My Ride" hoopty.

A fool and his money are soon parted, so with my golf clubs in the trunk, I'm tooling around Napa/Sonoma in my new BMW M3 with the top down, trying desperately to keep the wind noise down while using my Bluetooth headset.

If you've lasted this far, I'll get to the point of the story. Now, being an ex-military man, I usually drive like a funeral home director. Well, the M3 is a seductive mistress indeed, and she likes it when I lovingly stroke the manual transmission stick shift and get her all worked up to around 5000 rpms as I upshift and accelerate, especially once I get out of the City and on the open highways of I280.

If you've spend anytime on I280, you know the average speed of moving traffic is around 95/mph. If traffic is moving, it is moving at a high rate of speed.

One morning, I'm running late, and I've got to be in Cupertino for one reason or another. M3 is running very smoothly, and I hit Page Mill Road, Sand Hill/Menlo Park, and as I pass the Woodside exit, I'll be damned if I dust this Mercedes sedan on my left like it was standing still. Didn't think much of it until he comes up right behind me, and I look back, and I think it is SJ himself.

Now, I don't have an Apple sticker or anything on the M3 yet, but I know I'm getting off at De Anza Blvd, and now I'm starting to sweat bullets.

Not to worry, at the first opportunity, the Mercedes SL55 AMG with no license plates, driven by SJ himself blows by me, and exits at De Anza.

I get off at De Anza too, but head farther down to Stevens Creek to get a cup of coffee before showing myself at Cupertino HQ, late or not.

Later, I see the SL55 (again no plates) parked in the handicapped spot right across from the Apple Company Store on IL1. Sure enough, more often than not, at the end of the day, when walking across the parking lot at 1700 to BJ's for an evening brewski, I'd see that same Mercedes sedan, no license plates, in the handicapped spot.