Memo From Jobs: The Perks Have Peaked
Apple Computer Inc. co-founder Steve Jobs, harking back to the company’s early days, is axing sabbaticals, ending cash bonuses for executives and reducing severance pay.
Jobs, who has become Apple’s de facto leader, announced the changes in an electronic mail memo to employees on Tuesday.
The memo, signed “Steve and the Executive Team,” also said Apple’s board of directors approved more stock options for employees as an incentive to turn the company’s fortunes around, Jobs said.
The message is the latest evidence that Jobs is essentially running the company he co-founded 21 years ago--despite his refusal of the chairman and chief executive posts.
“Today we are taking a few more steps which will begin to take Apple back to its roots as a more egalitarian, entrepreneurial company,” Jobs said in his memo.
Investors seemed to take comfort in the news. Apple shares rose $1.56 to close at $23.63 on Nasdaq.
Cupertino-based Apple has been struggling against financial losses, disappointing sales and eroding market share. Last month, the board ousted Chairman and CEO Gil Amelio, and last week Apple replaced most of its board and announced an alliance with Microsoft Corp.
“It makes perfect sense to me. He wants Apple to start thinking again like a high-tech start-up,” Lou Mazzucchelli, a Gerard Klauer & Mattison analyst, said of Jobs’ memo.
“I think he has always been upset that the company turned into this bloated, bureaucratic organization,” Mazzucchelli said. “He is using his informal authority as founder of the company, and I’m sure he is doing it with the blessing of the board.”
Jobs said Apple is eliminating cash bonuses for executives, replacing them with stock options. The company is also reducing severance pay to one week of salary for every year worked, from one month of pay for every year worked. Laid-off employees will still get a 60-day notice with full pay and benefits.
In addition, Apple is now requiring all employees to fly coach on trips shorter than 10 hours and business class for longer trips. Employees can pay for their own upgrades or use mileage awards.
Come October, the company will eliminate sabbaticals, a perk it adopted early on and a benefit popular with employees.
“Apple needs all hands on deck for the foreseeable future as we turn our company’s fortunes around,” Jobs said.