Here we go again. Bloomberg's Graef Crystal put Apple CEO Steve Jobs on this year's list of Pay Anti-Heroes in Crystal's annual nominations for the Executive Pay Hall of Shame and Fame. Why? Crystal says Jobs is guilty of receiving "wildly excessive pay."
"Granted, Jobs worked for $1 a year after he returned as head of Apple in 1997, and the stock's performance was terrific, with a compound annual return of more than 109 percent a year during his first two and a half years," Crystal concedes.
"But Apple's board went overboard when it came time to reward him. First there was the gift of a personal Gulfstream V jet worth $45 million," continued Crystal. "Then there was the $45 million for the taxes on the gift of the jet, and for the taxes on the money for the taxes, etc. But the real piece de resistance was the option grant covering $872 million of Apple stock, the largest ever granted to one man on one day. Can the Apple board seriously claim that it studied the competitive pay environment before deciding the 'going rate' for a top-notch CEO includes a free jet, $45 million in cash and 20 million option shares?"
Perhaps not, but then again, Jobs is hardly your typical CEO. And Gulfstream jet aside, Jobs hasn't taken as much money from Apple as it appears superficially, at least reading stories like Crystal's. In fact, Fortune magazine chided Jobs earlier this year for accepting that generous stock option package. Like Crystal, Fortune also congratulated the man for his turnaround of Apple.
Steve Jobs wrote to Fortune in response. In his reply, Jobs pointed out that his option to purchase 20 million shares is "worth zero," since it was granted at $43.59 per share -- a much higher mark than the stock was trading at the time of his letter (about $24 per share -- almost $7 more than they are now). Jobs then cheekily offered Fortune "the deal of a lifetime" to buy his options for half their face value.
Editorial rant: There's little question that a lot of executives get paid a disproportionate amount compared to the actual contributions they make, but can we really count Steve Jobs in this category? The man came back to Apple during its most desperate hour, and has continuously spearheaded efforts that have transformed the company dramatically -- the iMac, Mac OS X, the list goes on and on. The current economic climate is hostile to Apple's stock value, clearly, but there's little question in my mind that there would be little if any Apple left to take stock in unless Jobs had taken control when it did.
This story, "Here we go again: Jobs' compensation under scrutiny" was originally published by PCWorld.