In its report, Apple suggests that one reason Jobs tolerated backdating is that he didn't understand basic options accounting, particularly the pre-Sarbanes-Oxley need to expense any option carrying a price other than that established on the date it was made final. It may beg credulity that such a powerful executive is such an accounting novice, but many techies say they paid little attention to those details during the boom years. Options were a way to lure talent, and they left the details to auditors and lawyers. Says one Valley CEO: "Today's perspective is being applied to something that was an industry practice. We were all fighting to find and keep great people."

But now that backdating is front and center, it's clear that Jobs-led companies were knee-deep in it. On numerous occasions since 1997, top lieutenants at Apple and Pixar received options priced on days when the stock was at monthly, or in Pixar's case, near-yearly lows. That includes the 10 million-share grant to Jobs in early 2000, which came just after a 22% nine-day plunge in Apple's stock price and preceded a subsequent 30% increase in the eight days that followed. "I'm not saying it was backdated and I'm not saying they did anything illegal, but [the circumstances are] consistent with manipulation," says University of Iowa finance professor Erik Lie, whose research helped ignite the options scandal.

Jobs never directly cashed in on those options, or those from another big grant in 2001, because Apple's share price fell below the strike price. But in 2003, Apple's board swapped the "underwater" options for 5 million restricted shares of stock with a value of $75 million. For some, that raises the question whether Apple pegged the stock grant to the backdated value of the options, and whether Jobs, as the special committee maintains, "did not receive or financially benefit from these grants."

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If Jobs ever does step down, there's no obvious replacement, compounding the risk for Apple shareholders. More than likely, Chief Operating Officer Timothy D. Cook would take the helm; that's what happened when Jobs took six weeks off in 2004 to undergo successful cancer surgery. But while Cook is a respected operations wonk, he lacks Jobs's charisma, leadership, and gut for tech trends, say analysts.

Some legal experts say Apple missed an opportunity when the board committee issued its report. Rather than absolve Jobs of all blame, it should have admitted he'd made a mistake that was common during the excesses of the boom and agree to have Apple employees, including Jobs, reimburse investors for any losses.

Now all Apple's shareholders can do is hope that regulators prove as forgiving as the board. Says former SEC Commissioner Joseph A. Grundfest, a professor at Stanford Law School: "Steve Jobs is a national treasure, and Apple has to do everything it can to keep him actively engaged. If Martha Stewart can stay at her company, there should be no issue -- even in the worst case -- in designing a structure that keeps Steve Jobs at Apple."

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