Is Steve Jobs Paid Too Much?

  • Posted: 10 July 2001 05:02 PM #16

    Is Steve Jobs overpaid?

    To quote the harvard lampoon, If you said no, please remove your crazy pants and put on a more comfortable pair of commonsense trousers.

    Steve Jobs paid $300 MILLION dollars when his company is losing money and he is “committed to turning that around?” When $300 million is about 150% of what the company made in a good quarter when it was profitable?  Excuse me! I’m a shareholder! I sure as hell don’t want $90 million of my company’s profits pissed away on some corporate gift! I don’t want my stock watered down by hundreds of millions in stock options to a CEO who has been perfectly happy working for $1 a year!  Granting a single employee such an exorbitant salary is bad for the company, very bad for the stock (how much more expensive is its valuation when you wipe out more than half of the year’s earnings?) and an incredibly stupid move in general.  What on earth does it do?  Jobs is already a billionaire, the money isn’t important to him (or perhaps he would accept a real salary) but it sure is important to me as a stockholder, and I (the collective shareholders of the company) should have a say in such a lucrative/ludicrous position.  Sure, he’s done a good job, a great job.  But I can do an utterly fantastic job at what I do and I won’t come close to making $300 million in a year.  Why?  Because my employer has an ounce of common sense and acknowledges that no matter how good a job I may do, it will not be worth $300 million to him.  If by some crazy twist of fate it was, he still wouldn’t pay me that because I wouldn’t have the audacity to demand it.  Likewise, the job that Steve did was not worth $300 million and it is crazy to reward him as such, especially when he does not demand it.  That $300 million could have gone a long way in advancing sales and giving stockholders a return on their money,  but now it will just sit in Steve’s bank account and fly him to florida once a year.  Ay caramba.

         
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    Posted: 10 July 2001 09:54 PM #17

    Anonymous, Steve didn’t get paid US$300 million.  Those options are worthless unless he raises the price of Apple’s stock, your stock, significantly.

    Don’t confuse cash with with options.

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  • Posted: 10 July 2001 11:09 PM #18

    Can we open this discusson again once Steve has actually been paid anything? I mean, OK 90 Million dollar jet for 4+ years of service and a compensation package that is worth nothing until he dramatically increases share holder value doesn’t sound like much in the high tech CEO world. I mean really! you have to respect a CEO that is not going to get a dime until he makes the company more valuable! This is exactly the kind of motivation I want the CEO of my company to have!

    But just for argument sake lets say that his options become worth something some day. Lets say a lot. There are people who question what Steve has done for the company. Well, although I disagree with some of his decissions, there effect on the company has been very positive. At the height of apple’s value, after steve left the company, it was worth aprox $72/share (or $36/share split adjusted). Durring the darkest years Apple’s market share declined and stock hit a low of about $12/share(or $6 split adjusted) shortly before Steves return.
    When he returned, he killed the newton (still a questionable choice) re-directed the OS direction toward Carbon, introduced the most successful Mac of all time (and the iMac was Steves project) and has been getting the company to hit OS deadlines with better accuracy than Apple or Microsoft ever has in the past. Under his direction the company just put out two of the best laptops the industry has ever seen (and I can’t wait for Expo) and should follow it up with new desktops.
    He has returned the company to it roots with unparalled ease of use applications that can actually drive sales (iMovie, iTunes, iDVD, DiskBurner). wait!! I can hear it already…NO he didn’t write these programs he just authorized the expense that allowed them to be written. But don’t confuse Steve with some glass house CEO. This man is involved day to day. Many employees would tell you too involved for their comfort.
    So what did all this mean to the value of the company? The Market Cap of the company increased by Billions of dollars (at the high point I think it was about 20 Billion instead of the 2 Billion that Steve started with) and even today in one of the toughest tech stock times we have ever seen, Apple is worth about 5 Billion more than when steve took over. How much is that worth to you Mr. stock holder?
    I’d say that if Steve can get Apple to trade somewhere in the 40’s, where he will start making money, that nobody will question his compensation. Boy I hope someday I can complain about the Billion dollars that Steves compensation package is worth, because that will mean that he has made the stock holders a @#$% load of money!

         
  • Posted: 16 July 2001 03:36 PM #19

    several people posting here seem to think that options are a perfect form of compensation (Steve doesn’t make money until we all make money!) but that’s not true.  You can’t discount the option part of Job’s salary just because it isn’t paid in cash.  Options cost money to buy because they are worth something.  When options are profitable to the party who is granted them or buys them, they yield incredible amounts of money—which is paid by the party who creates the option, apple in this case. 

    That’s a very shallow description, this article goes into a little more depth as to how options can cost companies billions of dollars. 

    http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=202912

    The article does not mention it but they also can depress the stock price if the company issues the stock from its own holdings, as the introduction of millions of shares into the open market causes the share price to sag (supply and demand…)

         
  • Posted: 16 July 2001 06:15 PM #20

    Excellent point, Mr. Anonymous.

    But, as someone above mentioned, if Apple’s stock price goes up (effectively increasing the amount of money Jobs has made at Apple) people will stop saying he’s overpaid, ironically.

    Oh, well, I suppose “there’s no such thing as bad publicity” for Steve (or however the quotation goes).

         
  • Posted: 24 July 2001 12:24 PM #21

    My own feeling is that journalists make too much money. I wish they were canonized, so we’d only have to kiss their rings.

     

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