Thursday, December 06, 2007

oPtion$ Book Club: Some Final Thoughts

Thanks to all who have participated in the "oPtion$" book club.  Many thanks to Renee Jones, Darian Ibrahim, Michael Dorff, David Zaring, and especially Daniel Lyons for sharing their thoughts on the book, backdating, Steve Jobs, corporate law, and the nature of CEOs.   Thanks as well to the commenters for their thoughts comparing the backdating at Apple with other scandals of recent vintage.

I wanted to close the club with some final thoughts about a deeper theme I found in the book.  Yes, it's a parody, and yes, it's a delightful and breezy read.  But I think Lyons is getting at some deeper issues here as well.  One issue that I haven't really seen discussed is the book's view on Jobs's semi-messianic role in our consumer society.  Jobs's religious fervor, and his cult-like following, are certainly ripe subjects for parody.  But Lyons tries to go a little deeper into this phenomenon, in a scene that's reminiscent of the story of the Grand Inquisitor in the Brothers Karamazov.

In the scene, a younger Jobs has traveled to India to study under a guru named Krishna Neeb Baba.  Baba, a former psychology professor at Harvard, has a coterie of followers who travel from far and wide to hear his pronouncements.  But Jobs soon realizes that Baba is a fake.  In a scene back at Baba's house, Jobs accuses him of being a fraud.  (pp. 184-87)  Baba responds:

Look, is Catholicism a racket?  Is Christianity a racket?  Or Judaism, or Islam?  Just because you or I don't believe in those religions doesn't mean they're rackets.  They serve a purpose.  A good and noble purpose.  So do I.

Baba argues that people need something to believe in -- they have a hunger for meaning.  Religion tries to provide that, but only for some.  Then Baba provides Jobs with the critical insight he later exploits. "America is all about commerce," he says.  "Someone is going to figure out a way to create material things and to imbue them with a sense of religious significance."

So is the iPod the new version of bread and circuses -- the 21st Century opiate for the masses?  Perhaps.  But there's also a sense that Jobs himself buys into the religion.  After all, he is the genius behind the design.  The iPhone is not a fraud, in that sense, because it does serve a purpose -- even if it's merely a consumer good.  Despite his many flaws, fake Steve does has a sense of the aesthetic.  And this "religion" is what keeps him going.  When he's jousting with board chairman Tom Bowditch at the end of the book, fake Steve ruefully makes the following assessment:

For a moment it seems as if he's going to turn around and give me some big lecture about capitalism, and tell me how all my ideas, all my struggles, all my fights and failures and late nights meditating on products are nothing more than a way for people like him to make money.

In the end, money and aesthetics are too intertwined for fake Steve to ever pull them apart.  But there is that final sense, here and at the novel's end, that money really comes second.  And that is reassuring.  Apple worship may be a thin and vulgar religion, but at least it has its own sense of integrity. 

Posted by Matt Bodie on December 6, 2007 at 12:41 AM in Books, Corporate, oPtion$ Book Club | Permalink | Comments (1) | TrackBack

Wednesday, December 05, 2007

oPtion$ Book Club: A (Fictional) Version of the Backdating Scandal

I wanted to respond to the question posed by Dan Lyons: could Jobs still be indicted for the backdating at Apple?  And perhaps, the question lurking behind this one: why hasn't he been indicted already?

Many of the "oPtion$" reviews have noted its  somewhat fanciful plot.  What surprised me about the book, however, was how close the plot points actually followed reality. 

  • In the book, Apple GC Sonya Bourne resigns almost immediately after the backdating scandal breaks.  In reality, Apple GC Nancy Heinen resigned in May 2006 without a reported reason.  She has since been civilly charged by the SEC for backdating.
  • In the  book, Apple blames former CFO and board member Zack Johnson for the backdating.  After Apple blames him for the scandal, Johnson then agrees to a plea and to testify against Jobs.  In reality, former Apple CFO and board member Fred Anderson settled SEC backdating charges for a payment of a civil penalty and a $3.49 million disgorgement.  He also issued a statement claiming that Jobs knew about and in some cases directed the backdating.
  • In the book, the final straw for the Apple board is when they find out that Jobs falsely claimed that certain options were approved at a board meeting that never happened.  In reality, Anderson claims that Jobs provided assurances that the board had approved certain grants and that Anderson "relied" on these assurances.

One of the reasons why I was eager to read "oPtion$" was to see its take on the role Jobs played in the backdating.  What was fake Steve's motive?

Motive plays a critical role in the backdating scandal.  Why did firms backdate their options grants?  Was it simply to manage the process so that the company could (knowingly) reward its employees more handsomely, given accounting constraints?  Or was backdating an attempt by some in the company (generally the officers) to increase their compensation without the approval of the board or shareholders?

The fake Steve of "oPtion$" doesn't really show his cards to the readers on this point.  Fake Steve is so rich that he seems unconcerned and disconnected from his yearly compensation.  But at other points, he seems well aware of what happened.  For example, he justifies backdating at Pixar as a way to "sweeten things a little bit more" for John Lasseter, who was being courted by Disney at the time (p. 112-13).  (Thus, in fake Steve's view, Disney is to blame for the backdating.)  At another point, former CFO Johnson claims that Jobs knew all about the backdating and, in fact, directed Jonhson to do it (pp. 87-89).  During the conversation, Jobs claims ignorance.   Although it seems like we're not supposed to believe Jobs here, he never comes out and confesses to the reader.  He just doesn't seem to care.

The closest the book comes to laying out the case against backdating is this soliloquy from Apple's chairman Tom Bowditch (p. 89):

I know what you did.  You double-dipped.  Wasn't enough for you to get ten million shares.  You had to backdate them, too, and try to squeeze a little extra out of it. . . . Maybe you figure nobody in Washington actually reads those forms you send in every quarter.  Maybe you figured nobody would care, or that they'd give you a pass because you're the Great Steve Jobs.  Well, you're wrong.

But it's hard to know if this is an accurate indictment, because (1) Jobs never owns up to this, and (2) Bowditch turns out to have a huge short position in Apple stock and thus wants Jobs to resign.

As I've said before, it's clear to me that backdating was a method of increasing the value of the options and thus increasing the value of the pay.  I don't think many CFOs said, "We can give 10 million backdated options or 10.2 million correctly date options -- which is better?"  Instead, I'd guess that the number of options was settled on, and then the backdating was applied as a "bonus."

But who knew about the bonus?  That seems critical.  If the board was on board with the backdating, it seems less like stealing.  Since the board is charged with negotiating and approving executive pay, the board's knowledge would seem to lend the corporation's approval.  Dennis Kozlowski sits in jail because he failed to get board approval for expenses and loan forgiveness.  The same could be said of backdating.

Even with Board approval, however, there are problems.  "Backdating" is, by definition, lying about the date of the option.  So a scheme of backdating is designed to mislead somebody -- the board, shareholders, and/or the SEC -- about the date of the grant.  A scheme to avoid the accounting rule in this manner is akin to other forms of accounting gamesmanship.  The scheme in Brocade was apparently along these lines.  Moreover, as Vic Fleischer has discussed, companies that were backdating options were also violating the tax law.

My sense is that when it comes to Steve Jobs, criminal charges would only come if he knew about the backdating and purposefully circumvented the board and/or accounting rules in conducting the scheme.  There is certainly evidence from Fred Anderson to this effect.  But the independent Apple report seems to place all the blame on Anderson and Heinen.  Perhaps the SEC is being overly credulous, as Lyons indicates, in believing that Jobs was not intimately involved in the scheme.  But perhaps the government may have decided to avoid a risky trial based on Jobs's intent.  In the Brocade case, there appears to have been sufficient evidence that Reyes knowingly and repeatedly backdated to avoid the accounting hit.  Although the judge in the Brocade case indicated some concern with the mens rea issue, there was evidence from a former human resources employee that Mr. Reyes told her that the practice was “not illegal if you don’t get caught.”  There may not be such clear evidence of knowing illegality with respect to Jobs.

I don't know all of the facts, certainly, so I don't want to endorse or justify this decision.  Without all of the facts, we can only speculate about motives -- which is part of what makes "oPtion$" so fun.  In the book, an iPhone-crazed mob chases U.S. attorney Doyle to his death.  I'm not sure whether this is poetic justice or an exaggerated metaphor for reality.

Posted by Matt Bodie on December 5, 2007 at 12:10 PM in Books, Corporate, oPtion$ Book Club | Permalink | Comments (4) | TrackBack

Tuesday, December 04, 2007

oPtion$ Book Club: Not so Much Ado About Backdating

Late to the party, I'll only note that I liked Options plenty, that some of the stuff I was thinking of has been thought of by my intelligent fellow-book-clubbers, and that it's an honor to be on the same blog with Dan Lyons.  Instead of going through all the reasons why I liked the book, I thought I’d focus my comments here on a difference, a scene, and a question.

  • Difference Options the book and Fake Steve Jobs the blog, although putatively written by the same person, are case studies in the different ways a writer can go with the same satirical fabric.  And here, it would be hard to imagine a more different difference.  FSJ is hero in one format and anti-hero in another.  The blogger is your gleefully truculent guide to Silicon Valley, bursting the hyperbolic bubbles that need to be burst, mocking the business plans that need to be mocked, and doing you the service of high-end media criticism in a part of the journalistic community that, it seems to this outsider, sorely needed it.  But the novel’s protagonist has a much more troubled mein.  Funny, yes, but confused, capricious, and increasingly unhappy as a legal investigation and business wrangling darken his horizon.  One advantage of the more internally directed version of FSJ lies in the opportunity to do things that you like to see in novels, such as dream sequences, metaphors, and story arcs. I’m not sure that the anti-hero goes through a catharsis at the end, but I did suspect that, after reading, that the novel format might lend itself better to an anti-hero than would a blog post.
  • Scene One thing about litigation practice is that it often turns into unlitigious (at least as far as the rules of civil procedure go) dispute settlement.  Options has a great scene near the end of the book where Jobs takes over a meeting with backdated-options-investigating prosecutors, starts hurling insults, and finally initiates an over-the-top bargaining process, beginning with “whatever profits you frigtards think I made that were inappropriate, I’ll give them back. Plus I’ll pay a fine of one hundred million dollars.  I’ll admit wrongdoing, I’ll do community service.”  Things get more extreme from there, to the point where FSJ concludes that the prosecutors are “not interested in settling this.  You want a big trial, You want the free publicity.  You want to launch a political career, and you’re drafting on my celebrity to get yourself some attention … and that’s what I’m going to say when the Wall Street analysts and the media start calling me.”  The prosecutors are double-plus nonplussed.  Jobs’s lawyer is going nuts.   My takeaway: nice depiction of a clash between deal-making and legal process, and maybe the whiff of legal realism added value too.
  • Question I took the book to be suggesting that it looked like FSJ was up to no good with the backdating.  But Lyons, in the post below as well as in the book, like everyone who looks at real backdating at real Apple, seemed deeply ambivalent about whether the investigation was worth the candle.  Would we really want Steve Jobs penalized for the way he is running Apple?  For that matter, how do we feel about the dual-class stock that lets the founders do whatever they want with Google?  Both of these things may be bad corporate governance in the view of a large portion of the academy.  But are they bad for business?  Is successful high tech where corporate governance mavens meet their Waterloo?  At least with the backdated, never exercised Jobs options, I suspect that my sympathies lie with Apple.


Posted by David Zaring on December 4, 2007 at 04:50 PM in oPtion$ Book Club | Permalink | Comments (0) | TrackBack

oPtion$ Book Club: Steve Jobs and CEO Centrality

Optionsimage Lucian Bebchuk, Martijn Cremers, and Urs Peyer have a new paper out called CEO Centrality.  The paper is based on a series of regression analyses designed to determine the effect of "CEO centrality" on executive compensation and firm value.  The authors define centrality as the CEO' s share of the total compensation given to the top five executives at the company.  The study finds that higher centrality is correlated with a lower firm value (measured by Tobin's Q), lower accounting profitability, worse acquisition decisions, and more "luck-based" compensation.  In other words, CEO centrality is bad.

When I first read about the Bebchuk, Cremers & Peyer paper, I thought immediately of Steve Jobs.  In the colloquial definition of the term, no CEO would seem to have more "centrality" to a company than Jobs.  Jobs is seen as the genius that is Apple, the mesmerizing force behind some of the most successful tech products ever: the Mac, the iPod, the iPhone.

"oPtion$" has a lot of fun poking fun at this image.  For example, there is the extended comparison that FSJ makes between himself, Mozart, and Moses (pp. 35-36): all born with unique talents into the exact right place and time to develop those talents.  I also enjoyed the vignette between Jobs and the iPhone engineers, in which Jobs objects to the design of the phone's circuit board (pp. 50-53).  The engineers point out that the circuit board is laid out for optimum performance, and Jobs clearly doesn't understand how it works.  Nevertheless, he insists on making it "perfectly symmetrical" and ends up firing the head of the project over it.

Like Darian and Michael, I enjoyed the parody but found the Fake Steve Jobs to be a little too incompetent.  After all, the media seems completely on board with the notion that Jobs is a jerk.  But is he a genius?  There seems to be agreement on this as well -- yes.  The Jobs in "oPtion$", however, shows little of these inherent abilities.  Is there something more behind the parody, or is it just fun to pretend he's stupid?  Perhaps these expectations are too high for a light-hearted parody.  But what is Jobs -- a sociopathic genius or a fraudulent poseur?

I focus on this question because I think it goes to the heart of the compensation issue.  What is Steven Jobs worth to Apple?  Is he worth the innovation he brings?  If so, how responsible is he for this innovation?  What slice of the pie is he entitled to?

The easy answer would be -- he's worth what the market will pay him.  But the market isn't some anonymous force, an oracle at Delphi that issues its price pronouncements.  The market is us.  And how does our economy determine what Steven Jobs is worth?  It may be that Jobs is worth the value he has provided for Apple shareholders.  If this is his value, he's undercompensated.  As the fictional chairman of the Board notes in "oPtion$", Apple stock would probably drop 30% if Jobs were no longer CEO.

Steven Jobs is thus the best poster child for high CEO compensation.  He has famously has taken a salary of $1 ever since he returned to Apple.  His apple stock options are by no means on the Ebbers-Kozlowski ends of the spectrum, and most of his fortune is from his ownership of Disney stock.  (His "centrality" index at Apple would, ironically, actually be fairly low.)  And yet perhaps no CEO deserves more.  He's had a huge effect on the stock; check out this chart of Apple share price over the last five years.  Moreover, he truly seems to be the driving force behind the company's products.  He's not just the chief executive officer -- he's the chief creative genius as well.

I'd like to respond to the backdating issue in a separate post.  But I think the notion of CEO compensation -- how it works, what they deserve, what Steve Jobs deserves in particular -- is central to how we come down on the backdating.  I'd be curious to hear what other readers of "oPtion$" think it has to say on the ability-compensation nexus.

Posted by Matt Bodie on December 4, 2007 at 04:12 PM in Books, Corporate, oPtion$ Book Club | Permalink | Comments (1) | TrackBack

oPtion$ book club -- some thoughts on backdating

I'm really curious to hear from law professors about options backdating and the law and whether you think anything is still lingering around Steve Jobs and Apple. When I wrote my book proposal and outline, exactly one year ago, the "scandal" over backdating seemed to present a very real threat to Jobs and to Apple. I wrote the book not knowing where things would stand by the time I would deliver a manuscript in June. As it turns out things seem to have blown over yet I can't help wondering if the SEC or US Attorney might still be looking at Jobs. I say this only because Apple's explanation seems to make no sense at all. Their line is that they hired their own lawyers and did their own investigation and concluded that yes, things happened, but that somehow Jobs had nothing to do with it -- it was all the fault of Apple's former CFO and general counsel. To me as a lay person this seems ridiculous. But maybe to legal experts it makes sense. It really seemed to me that Apple had just thrown Fred Anderson (ex CFO) and Nancy Heinen (ex GC) under a bus in order to save Steve Jobs.

I'm no expert but my personal feeling is that the entire backdating thing is crazy rubbish and not worth the effort that has been put into it. My heart really goes out to Greg Reyes at Brocade who is facing prison time over this. It seems crazy and way out of proportion to me. But if the authorities are going to go after these people how can they just accept Apple's internal investigation and be satisfied? Could they really believe that Steve Jobs, a notorious control freak and micromanager, had nothing to do with the timing of options grants to himself and others? Anderson, the former CFO, has settled with the SEC and put out a statement saying, in effect, that Jobs was deeply involved in all this. Would the authorities hold off on Jobs simply because he's very high profile and/or because going after him would hurt the market valuation of Apple? It's been suggested to me that perhaps the prosecutors don't dare take on Jobs. Could that be so?

Posted by Daniel Lyons on December 4, 2007 at 03:51 PM in oPtion$ Book Club | Permalink | Comments (2) | TrackBack

oPtion$ book club - oPtion$ as Social Commentary

Since this is a discussion on an academic blog, it seems appropriate to consider how oPtion$ might contribute to our understanding of corporate governance, corporate law, and enforcement policies.  The power of satire as social commentary lies in its ability to point out indirectly those realities so blatant as to be frequently overlooked.  Unlike Michael Dorff, I think the book succeeds on this level. 

One small example: my son, who overheard me discussing the book asked  me "Who's Steve Jobs?'  Invoking fake steve's favorite retort, I replied "Dude, he invented the friggin iPod.  Have you heard of it?"  "I thought Apple invented the iPod," my son asked innocently.  "Yes," I explained, "but Steve Jobs is in charge of Apple."  My son persisted, "but didn't his workers invent the iPod?"

With one humorous line -- Dude, I invented the friggin iPod.  Have you heard of it? -- Lyons exposes a common foible among corporate executives.  They gladly hog credit for corporate successes and are quick to blame others, or factors beyond their control, for corporate failures.

More significantly, fake steve's attitude toward corporate regulation and law enforcement lends support to the academic school of thought that links compliance with law with perceptions of law's legitimacy.  Scholars such as Tom Tyler, John Darley and Paul Robinson argue that the extent of law compliance is determined less by concerns with penalties and more by an individual's sense of moral obligation to obey the law.  This sense of obligation is supported by perceptions of the legitimacy of the law and its enforcement mechanisms and procedures.  When law or law enforcement is perceived as illegitimate, the sense of obligation to obey the law erodes.

Fake steve's reaction to the options backdating investigations underscores this point.  According to fake steve, "These idiots went after dozens of companies in Silicon Valley.  They concocted a fairy tale about greedy executives lining their pockets and cheating investors, and of course the nitwits in the press bought the whole story and ran with it."

Fake steve proceeds to denigrate everyone involved in the investigation. When that doesn't work he finds a scapegoat, and throws a trusted associate under a bus.  When the scapegoat flips to become a government witness fake steve's first  instinct is to have him killed.

The link between legitimacy and law compliance raises questions as to what, if any, responsibility corporate scholars bear for the degree of disrespect for corporate regulation that seems to have persisted in Sarbanes-Oxley's wake.  Robert Prentice and Jay Brown, among others, have pointed out the corroding effects that academic attacks on Sarbanes-Oxley as "quack corporate governance" or a "debacle" may have on the general level of respect for corporate laws.  These vehement academic attacks when taken to their logical extreme help make the scene from oPtion$, in which Senator Sarbanes and Representative Oxley are burned in effigy, appear to be a legitimate political protest.

Posted by Renee Jones on December 4, 2007 at 03:16 PM in oPtion$ Book Club | Permalink | Comments (2) | TrackBack

oPtion$ Book Club

Option Thanks, Matt, for inviting me to participate.  oPtion$ was, first and foremost, a delightful read.   It's one of those rare books that actually made me laugh out loud, not just once but over and over again.   For the exam-weary professor looking for a light-hearted break from the sixty-fifth description of the Business Judgment Rule or the Statute of Frauds, this book is ideal.

But from the perspective of a corporate governance junkie, the book's greatness is also its most disappointing flaw.  What makes the book so wildly, hysterically funny is how incredibly over-the-top all the characters are.  Fake Steve Jobs is a cartoon character.  He runs a major public corporation by spending most of his time meditating, doing yoga, hypnotizing his enemies, and playing practical jokes with his "closest thing I have to an actual friend" Larry Ellison, often while dressed in a kimono.  The book does capture some of the isolation from reality experienced by powerful CEOs, but takes it too far beyond reality to permit any meaningful exploration of the phenomenon or of its consequences for our economy.  Certainly part of the problem with corporate governance is the cult of personality that often surrounds the CEO.  That sort of corporate culture can lead to an arrogant sense of entitlement that may have contributed to inter alia, the rampant problems with options backdating.  More troublingly, it may yield business decisions made without much discussion or consideration of dissenting possibilities through psychological processes such as groupthink and social cascades (pardon my plug). 

We certainly see some of this in oPtion$.  I especially loved Fake Steve Jobs' response to any challenge:  "Dude, I invented the friggin iPod.  Have you heard of it?"  But the problems are all presented against the backdrop of such unreal characters and situations that the satire loses much of its critical force.   As comic relief, oPtion$ is a wonderful, creative, entertaining read, but as social satire I couldn't help finding it disappointing.

Spoiler Alert:  Unlike the New York Times reviewer, I really enjoyed the ending.  If you haven't yet read the book, you might not want to read on.  In the end, Fake Steve escapes to an island, replaced by his personal assistant Ja'Red (who has undergone plastic surgery to look more like Fake Jobs).  No one notices.  Ja'Red -- a college dropout who Fake Steve hired mainly out of unrequited lust for Ja'Red's girlfriend -- manages Apple just as well as Fake Steve, if not better.   

Lyons may have intended this  plot point as an indictment of  the real Steve Jobs' managerial talents (comments welcome!).  But I enjoyed it mainly because it embodies a notion I've long held that CEO talent is considerably less rare and unique than is commonly believed.  I'm not suggesting that most Fortune 500 CEOs could be replaced by English professors, but I do suspect that the difference between the best CEO candidate and the next best is far less significant -- and more importantly, far less reliably predictable -- than the different pay scales would indicate.  If I'm right, that sense of entitlement (and corresponding paycheck) is even less justified than we might think.

Posted by Michael Dorff on December 4, 2007 at 01:55 PM in oPtion$ Book Club | Permalink | Comments (0) | TrackBack

oPtion$ book club - "Enlightenment Requires Cruelty"

In oPtion$, Daniel Lyons explores the world of Fake Steve Jobs through the literary equivalent of a carnival funhouse mirror.  Every nugget of truth from Real Steve Jobs' life is contorted and magnified several times over to create a larger-than-life character whose pursuit of the twin goals of creativity and beauty has taken a real toll on his soul.  As a capitalist Zen Buddhist, Jobs lives by the corporate motto that "enlightenment requires cruelty" and in his personal time, when not meditating, Jobs pals around with the likes of Larry Ellison (a relationship that is corporate America's answer to Beavis and Butthead) and Bono (whose company Jobs enjoys because Bono is "the only person I know who's more self-absorbed than I am").  This lifestyle ultimately leads Jobs to question his priorities and to take drastic steps to re-prioritize.  Needless to say, oPtion$ makes for a fun (and quick) read.

While oPtion$ touches on a range of corporate hot topics, the corporate scandal du jour is that of options backdating, as the title gives away.  Rather than focusing on the merits of backdating probes, Lyons instead explores the competing motivations of players that may or may not have fueled such probes in the real world.  There is the U.S. Attorney seeking to launch his bid for California governor, the board member sitting on a large short position of Apple stock who sees the opportunity for a windfall by leaking unfavorable information about the company, the former CFO sacrificed by the company who ultimately turns state's witness to avoid jail time, and finally Jobs himself, who views the backdating investigation as a mere distraction from his real job and who alienates the government, his board, his friends, his assistant, and his attorney in the process of attempting to distance himself from the scandal.

While Lyons paints a harsh picture of Jobs, he does seem to acknowledge that Jobs and others like him are driven by the laudable and old-fashioned pursuit of making quality products for customers.  Granted, Fake Steve Jobs strives for creativity and beauty first -- functionality is a distant second -- and Jobs is not above stealing the ideas for his quality products from others.  But Jobs nevertheless strives in the end to give the public a product worthy of its time and money.  Given this valuable service, is it so wrong that Jobs asks us to forgive him and his crowd a little (or not-so-little) ego, eccentricity, and (gasp) even backdating?  Ultimately, Lyons could have made Jobs one part less "dysmathic" loon and one part more genius without sacrificing much, but then again, what fun would that be?  Silicon Valley may be its own quirky world, but it certainly has contributed much to the rest of us.

Thanks to Dan Lyons for an enjoyable read, and to Matt and everyone at PrawfsBlawg for giving me the chance to share some thoughts.

Posted by Darian Ibrahim on December 4, 2007 at 12:28 PM in oPtion$ Book Club | Permalink | Comments (0) | TrackBack

oPtion$ book club - Inside Fake Steve's Brain

Thanks for the invitation, Matt.  I am happy to join PrawfsBlawg for today's book club discussion of oPtion$, a parody by fake steve jobs (aka Forbes editor, Daniel Lyons).

What makes oPtion$ so enjoyable is the character of fake steve jobs that Dan Lyons brings to life.  Being inside fake steve's brain is a frightening experience.  He is at turns paranoid, arrogant, narcissistic, egomaniacal, insecure, insufferable and abusive.  Yet, lurking behind this dysfunctional exterior is a pained human being who yearns to be understood.  We get glimpses of fake steve's humanity when he laments the fact that he was adopted, working conditions at Apple's factories in China and his own cruel treatment of Yoko Ono as part of his pursuit of the Beatles music library for iTunes.

The plot of the book (Steve Jobs's travails caused by the federal investigation into options backdating at Apple) is very much in the background. Fake steve's mind is front and center.  What keeps pages turning is not wondering what will happen next, but what perverse thought will next enter fake steve's brain?  Despite the tangential nature of the plot to one's enjoyment of the book, there are many funny scenes to keep readers chuckling.  A few of my favorites:

  • Jobs's deposition where he antagonizes the prosecutors with racist comments, general condescension and his Zen Crazy strategy.
  • Job's attempted settlement negotiation where he offers to pay $1 billion in penalties and the feds turn him down.
  • Hillary Clinton's shake down of the Silicon Valley "war council" assembled to thwart the federal backdating investigation.  Hillary demands tribute from the Silicon Valley executives in exchange for favorable treatment when she takes office.  ("She tells us to check with George Soros on the way out and he'll tell us how to move the money so it can't be traced, using a bunch of these phony baloney environmental groups.")

Bottom line:  oPtions is a fun book that would make a great holiday gift for law students, law professors, corporate lawyers, technology buffs, really any one who owns an iPod or has ever coveted an iPhone.

Posted by Renee Jones on December 4, 2007 at 11:47 AM in oPtion$ Book Club | Permalink | Comments (2) | TrackBack

oPtion$ Book Club: Introductory Post


"America is all about commerce.  That's what America is good at.  Someone is going to figure out a way to create material things and to imbue them with a sense of religious significance.  I don't know how this will happen.  But it will happen, because it needs to happen."

- Krishna Neeb Baba in oPtion$

I'm here to welcome everyone to the PrawfsBlawg book club on "oPtion$," the novel/parody memoir of Apple CEO Steven Jobs, written by Fake Steve Jobs (a.k.a. Daniel Lyons).  We're very excited by the group of book club participants we'll have on hand:

I'll also be jumping in with a few posts of my own.  We encourage everyone -- club participants, author, readers -- to join in the comments. 

You can call up all of the posts in the book club by clicking on the "oPtions Book Club" category.  If you'd like some further reading material to get you in the proper spirit, here are some links:

Posted by Matt Bodie on December 4, 2007 at 10:45 AM in Books, Corporate, oPtion$ Book Club | Permalink | Comments (0) | TrackBack

Monday, December 03, 2007

"oPtion$" Book Club Starts Tomorrow

31mwi8vqbel_aa240_ Just a reminder -- our "oPtion$" Book Club starts tomorrow.  Further details are here.  If you want to see all of the posts in the book club, you can click on the "oPtion$ Book Club" category.

Posted by Matt Bodie on December 3, 2007 at 04:43 PM in Books, Corporate, oPtion$ Book Club | Permalink | Comments (0) | TrackBack

Wednesday, November 28, 2007

Book Club on "oPtion$" by Fake Steve Jobs

Options Next week PrawfsBlawg will be hosting a book club on the novel/parody "oPtion$" written by Fake Steve Jobs (a.k.a. Daniel Lyons).  The book received a nice review over the weekend by the NYT Book Review, which said it was "peppered with deft comic touches."

Rather than simply discussing its merits as fiction, the book club will be taking a look at "oPtion$" as a parody of the corporate world -- in particular, one of that world's most fascinating denizens.  The picture that "oPtion$" paints of Steve Jobs is of course a caricature.   But parody resonates only if it builds off of reality (or our perception of reality).   And the picture created by Lyons has that resonance.  We'll be talking about the big ideas behind the book, as well as what corporate lawyers, law profs, law students, and policy makers can take from it.

We're very excited to announce a terrific line-up of commentators:

In addition, we are fortunate to have Daniel Lyons joining us.  Dan is of course Fake Steve himself, but when not masquerading as the benevolent one, he's a technology writer at Forbes Magazine.  We're very much looking forward to exploring some of the larger issues behind the book with Dan and our prof commentators.

We plan on starting the book club next Tuesday, December 4.  We hope you'll drop by then.  In the meantime, if you are unfamiliar with the terms "namaste" or "freetards," you can catch up with the "Secret Diary of Steve Jobs" here.

Posted by Matt Bodie on November 28, 2007 at 11:42 AM in Books, Corporate, oPtion$ Book Club | Permalink | Comments (0) | TrackBack