Apple Seeks to Boost Bonuses
Apple Computer Inc., whose stock has more than tripled in the last year on sales of its iPod music players, said it wanted to boost cash awards to top managers because its executive pay wasn’t competitive, according to a regulatory filing Tuesday.
Chief Executive Steve Jobs, 50, received $1 in salary and no bonus or restricted stock for the year ended Sept. 25, Apple said in the filing with the Securities and Exchange Commission. In the year-earlier period, he got a $1 salary and $74.8 million in restricted stock, which replaced options that were no longer profitable. Those shares vest in March 2006.
Apple, co-founded by Jobs in 1976, wants to boost cash bonuses because executives at rival companies are paid better, according to a study it commissioned. The bonuses might make it easier for Apple to hang on to executives while competitors such as Dell Corp. and Sony Corp. try to copy the success of the iPod digital music player.
“At current levels, the company’s executive compensation program is not competitive,” Apple said in the filing.
Apple will ask shareholders at its April 21 annual meeting to approve the cash bonus plan. Two executives got cash bonuses last year: Ronald Johnson, retail vice president, and Avadis Tevanian, chief software technology officer.
Cash bonuses were paid to non-executive employees and directors. Under the bonus proposal, executives would get cash when certain performance goals were met. The filing didn’t specify how many managers would be included in the bonus plan.
The company in 2004 boosted restricted stock awards, which vest in two stages over four years. Restricted shares worth a total of $25.5 million were paid to four top executives who received none in the previous year. They are Timothy Cook, executive vice president of worldwide sales and operations; iPod Vice President Jonathan Rubenstein; Johnson; and Tevanian.
Those stock option and restricted share grants were infrequent and didn’t make up for the disparity in cash pay between Apple executives and their peers at other companies, according to Apple’s pay study, which was included in the SEC filing.
Shares of Cupertino, Calif.-based Apple rose 64 cents to $40.96 on Nasdaq.
Apple spokesman Steve Dowling didn’t immediately return a call seeking comment.
Jobs, who owns 10 million Apple shares, or about a 1.2% stake, has been paid a $1 salary since he returned to the company in 1997; he also owns 52% of Pixar, worth $2.73 billion.
