Apple's New Board of Directors Member Refused Stock Option Grant

Eric Schmidt, the newest member of Apple Computer's Board of Directors and Chief Executive of Google Inc., declined the automatic stock option grant that is given to new directors.

The Cupertino Company, Calif., announced the election of Schmidt as a director to its board Tuesday. Schmidt also sits on Google's board.

Apple announced the election of Schmidt as a director to its board also on Tuesday. Soon after, Apple reported to the Securities and Exchange Commission that Schmidt had declined the automatic stock option grant of 30,000 shares, which, according to the company's 1997 director stock option plan, new directors are entitled to. Instead, Apple announced that Eric Schmidt is planning to buy 10,000 of Apple's shares in the open market.

There has been no mentioning of when Schmidt plans to buy the shares, nor was any reason given in the SEC filing as to why he refused the automatic grant. It could be that the move is intended to keep Schmidt far away from the stock options scandal that Apple is currently going through, but that seems unlikely. More likely, this is a display of confidence in Apple's future on Schmidt's part. One thing is certain, Schmidt's broker must be happy about his choice.