The Value of a Dollar

February 14, 2003 12:09 AM

It's all about shareholder value.Steve Jobs has received tremendous positive press for only accepting one dollar per year as payment for his CEO services at Apple. How does he do it, you ask? Well, he supplements his income by a) being a billionaire, and b) renting out his corporate jet to Apple, at a cost of over 1.2 million dollars, over the past two years. Which is an exceptionally generous rental fee considering that Apple itself paid $90 million for the jet, which it bought for Jobs in May of 2001. This data was disclosed along in the most recent quarterly report in which Apple announced layoffs of 260 employees, none of whom were given a jet.
posted by jonson (13 comments total)

Don't forget that his little animation company called "Pixar".
posted by Down10 at 1:21 AM on February 14, 2003

Hmmm. On one hand, part of me wants to point out that basically, without Steve Jobs, Apple dies. At least, historically, that seems to be the case. So if Steve asked them to buy him the whole Cupertino campus and rent it from him, it might well make sense and keep them from laying off more people.

That said... I wonder if the folks at Apple realized they could keep the jet, and not pay rent to Steve. And even let him use it for personal reasons. And perhaps use the savings to not lay off ($1,200,000 / ( salary of $100,000 per year x 2 year)) at least 6 engineers.

Then again, maybe there's some tax benefit to Apple not owning it. Which would beg the question of why Steve would want it, either, unless it's another act of generousity on his part. Hmmm.

Perplexing indeed.
posted by namespan at 1:35 AM on February 14, 2003

He doesn't seem to be making a whole pile from Pixar either, and hasn't sold stock in a while.
posted by owillis at 1:37 AM on February 14, 2003

Jobs isn't "renting" the jet to Apple: he's using his own company
to recoup the (declining) fair market value of the plane.

In another light, the craft's timeshare can also be seen as a "morale booster" for the troops. They offer transportation for the CEO and founder, who allows them to employ the craft as a company vehicle.
Because the company pays for fuel and maintenance, everyone
(well, the boss, anyway) earns a tax deduction.

The corporate jet has become a latter-day version of the company cafeteria. The higher-ups eat for free, the regular staff pay full price for breakfast
and lunch, and the bottom-rung laborers are given vending machines.
In the company earnings reports, it all balances out in the end.
posted by Smart Dalek at 2:33 AM on February 14, 2003

the ultimate SUV's. corporate jets help support terrorism.
posted by quonsar at 6:41 AM on February 14, 2003

When Jobs came back as Apple's CEO he was given options for something on the order of 10,000,000 shares, which was a not insignificant percentage of the shares issued. I remember thinking at the time that every dollar change in the stock price was a $10,000,000 change in Jobs net worth.

On the other hand, given what he's done for the company, I think Apple's shareholders have gotten a fine deal. I don't put this in the anything like the same category as the other overpaid CEO stories we're reading so much about.

corporate jets help support terrorism.
I thought corporate jets helped support drug use.
posted by alms at 7:03 AM on February 14, 2003

Apple is an evil corporation too..ha-ha. (read in the voice of Nelson Muntz)
posted by Bag Man at 7:26 AM on February 14, 2003

$1.16 million dollars over two years for Steve Jobs?

Frankly, that sounds like a hell of a deal, as far as CEOs go.
posted by insomnia_lj at 7:35 AM on February 14, 2003

it's interesting to look how different news sources spin this story...

the mercury news article in the post clearly makes it seem like he personally is getting paid 1.2 mil a year for apple to use the jet, and we should be outraged that he is charging them this ridiculous amount for something they bought him. Obviously they evoked the desired reaction from several posters here.

the MacWorld version makes it sound like they are just paying for maintenance/gas, much like employees get payed $0.35 a mile for car trips. i.e. jobs doesn't see a dime of that money, his only payment is getting to ride around in the jet (admittedly a nice benefit, but certainly not a source of income/salary).

this british article says pretty much the same thing as the Merc, but with a slightly less bitter and menacing tone.

but if we look at the actual quarterly report, on the bottom of page 20 it clearly states:
In March 2002, the Company entered into a Reimbursement Agreement with its Chief Executive Officer, Mr. Steven P. Jobs, for the reimbursement of expenses incurred by Mr. Jobs in the operation of his private plane when used for Apple business. The Reimbursement Agreement is effective for expenses incurred by Mr. Jobs for Apple business purposes since he took delivery of the plane in May 2001. During the first quarter of 2003, the Company recognized a total of $84,000 in expenses pursuant to this reimbursement agreement. During fiscal 2002, the Company recognized a total of $1,168,000 in expenses pursuant to this reimbursement agreement related to expenses incurred by Mr. Jobs during 2001 and 2002.

this echoes what macworld said: apple isn't renting anything from Jobs, they are simply paying for him to use it for company business, just like they would pay for a plane ticket if he were flying commercially.

remind me again why this is news?
posted by rorycberger at 9:00 AM on February 14, 2003

$1.16 million dollars over two years for Steve Jobs?

Yeah, but the point is everyone is supposed to think Apple isn't paying him anything, which sends a message that the company comes first. Any amount he's getting from them on the sly undermines this.
posted by Hildago at 10:03 AM on February 14, 2003

everyone is supposed to think

apple's always been pretty up-front about this arrangement ... i wasn't aware i was supposed to feel misled.

this whole post begged a specious comparison and attempted to manufacture outrage where none is merited.
posted by donkeyschlong at 10:07 AM on February 14, 2003

Uhhhh....I cannot see what Steve Jobs has done for his shareholders since August 2000 when the company's stock took a 50% hit on a SINGLE DAY. I cried myself to sleep that night.

Apple's stock on Steve's return was bolstered primarily by the stock market bubble that shoved the company up into the $70s in 1999-2000. Granted, Steve did a great job turning the company around and redirecting it - but in recent years as the share values sit at the $14-16 range, he's done absolutely *nothing* to increase my shareholder value.
posted by tgrundke at 3:48 PM on February 14, 2003

After last year's bout of "well-timed" stock trading, I doubt many shareholders have much love for Apple's executive team. The price per share still has not recovered to the level it was at when CFO Fred Anderson decided to sell. This stuff about the plane is nothing compared with that.
posted by Potsy at 8:39 PM on February 14, 2003