Salary Is a Sliver of Jobs’ Cut at Apple
How does a guy who earns $1 a year consistently rank near the top of California’s highest-paid chief executives?
If you’re Steve Jobs, head of Cupertino-based Apple Computer Inc., there are several paths to riches -- including stock options and the award of a Gulfstream jet.
This year it was stock grants that put Jobs on top in The Times’ annual survey of executive compensation at California’s 100 largest publicly traded companies.
His earnings for 2003: $74.75 million, thanks to Apple’s decision to give him 5 million restricted shares of stock.
Jobs also earns $1 a week, or $52 a year, as CEO of Pixar Animation Studios in Emeryville, Calif. Jobs has not received substantial stock options or perks at Pixar, according to the company’s most recent proxy statement.
Grants of stock and options are fairly common for chief executives, of course, although the size of Jobs’ stock grants are noteworthy even in an industry that is generous with company shares. In 2001, however, Jobs’ pay package was truly unusual -- a $43.5-million Gulfstream V jet and $40.5 million in “other compensation.”
In this case, the “other” was a so-called gross-up payment. Translation: Apple paid the income taxes on the value of the jet, plus the tax on the income that Jobs had to report for having income taxes paid for him.
Apple spokesman Steve Dowling declined to discuss Jobs’ compensation, which according to the company’s proxy statement is decided by three directors: former Vice President Al Gore; Millard Drexler, former CEO of Gap Inc. and now head of J. Crew Group; and William Campbell, chairman of Intuit Inc.
All three directors meet the Nasdaq guidelines for independence, meaning that they are not Apple employees nor do they have any current business relationships with the company.
However, Jobs sat on Drexler’s board when Drexler was CEO of Gap. Jobs did not contribute to Gore’s presidential campaign, but he did give $50,000 to the Democratic National Committee on Nov. 1, 2000, just days before the presidential election, according to the Center for Responsive Politics in Washington.
Apple’s three-member compensation committee met 17 times in 2003 and says it emphasizes compensation that provides performance incentives. But the proxy statement offers little other insight into how Jobs’ pay is set.
The United Brotherhood of Carpenters and Joiners union, which owns 6,200 shares of Apple stock, asked for a clearer compensation policy this year.
The shareholder proposal asked Apple to set Jobs’ salary based on the average salary paid to chief executives at similar companies, with a $1-million cap. He would have been allowed a bonus and stock grants of as much as $1 million each, for total maximum pay of $3 million.
The proposal further stated that no one else at the company could earn more than the CEO.
Apple’s board opposed the motion, saying that Jobs earned just $1 and that it would be silly to pay other Apple employees less than that. The proposal lost by a wide margin at the company’s annual meeting.
In any case, the Gulfstream jet that Jobs was given in 2001 continues to cost Apple money.
The company reimbursed Jobs $403,766 for business use of the jet in 2003, according to its proxy statement. Pixar reimbursed Jobs $89,000 for jet use in 2002, the last year for which information is available.