- The Washington Times - Saturday, September 21, 2002

SAN FRANCISCO (AP) Software mogul Larry Ellison resigned from Apple Computer Inc.'s board yesterday, in a move that analysts attributed to investors' demands for more vigilant directors.
Mr. Ellison, the flamboyant chief executive officer of Oracle Corp., had attended less than 75 percent of Apple's board meetings during each of his five years as a director, according to Securities and Exchange Commission filings. No other Apple director missed as many meetings during that time.
Mr. Ellison stepped down after coming months, given his duties at slumping Oracle and his upcoming bid to win the America's Cup yacht race.
"My schedule does not currently allow me to attend enough of the formal board meetings to warrant a role as a director," Mr. Ellison said.
Apple's shares rose 30 cents to $14.88 during trading yesterday on the Nasdaq Stock Market.
Mr. Ellison's spotty attendance record at Apple's board meetings hadn't been an issue until a recent wave of corporate accounting scandals sharpened Wall Street's focus on the watchdog role of company boards.
The current push for more aggressive directors outweighed the cachet Mr. Ellison brought to the board as a Silicon Valley legend and one of the world's wealthiest men, said Soundview Technology analyst Mark Specker.
"It's the end of the dilettante board era," Mr. Specker said. "Investors won't tolerate having a director miss board meetings because he is too busy racing sailboats."
Mr. Ellison's departure leaves Cupertino, Calif.-based Apple with just five board members, including its CEO, Steve Jobs.
Mr. Ellison and Mr. Jobs have been close friends for years, a kinship that could have raised hackles with investors on the lookout for possible conflicts of interest.
But analysts said Mr. Ellison's chumminess with Mr. Jobs probably wouldn't have prevented him from remaining on the board if he could have shown up at more board meetings.
"Financial ties are more of a problem than friendships," said Charles Elson, director of the Center for Corporate Governance at the University of Delaware.
Still, if Apple replaces Mr. Ellison, "it would be nice to see someone from outside the Silicon Valley who isn't just another buddy of the CEO," said A.G. Edwards & Sons analyst Brett Miller.
Mr. Elson said shareholders should have been raising concerns about Mr. Ellison's frequent absences from board meetings long ago.
"Like the saying goes, 90 percent of life is about just showing up. If a director can't come to more than 75 percent of the board meetings, then he shouldn't be on the board," Mr. Elson said.
Mr. Ellison joined Apple's board in 1997 when Mr. Jobs rejoined the computer company that he co-founded during the 1970s.
With Apple suffering major losses at the time Mr. Jobs returned, Mr. Ellison helped give the company renewed credibility and guidance, analysts said.
"It was nice to have a friend like [Mr. Ellison] on your board because he is a guy who has made his big dreams happen," Mr. Specker said.
Mr. Ellison said he will continue to counsel Apple's management and Mr. Jobs said the advice will be welcomed.
Mr. Ellison, with an estimated fortune of $15 billion, didn't receive cash for serving on Apple's board. Apple began paying its directors with stock options in 1997. Mr. Ellison held 70,000 Apple stock options, according to the company's most recent SEC disclosures.


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