Reinventing CEO Pay-
Why $1 per year makes sense.
Steve Jobs’ passing was noted for his many innovations. In fact, tech journalist Harry McCracken whose Technologizer.com is one of my favorite regular reads, pointed out that Jobs was, in fact, the Great Reinventor in an obituary he penned for Time Magazine. Link: http://www.time.com/time/
Jobs’ greatest gift was timing. It works for entrepreneurs, inventors and comedians, all of whom can work under similar pressure. He knew how best and more importantly, when best to implement a great idea original or reinvented. I recommend you read Harry’s article for greater insight into what made Jobs so special. I know from friends inside Apple that he could be very tough to work for, but in the end, those who bought in and stayed in were rewarded for their efforts.
Steve Jobs was not the first CEO to take $1 annual pay, that honor belongs to the man whose autobiography was read by nearly everyone and in the 80’s, Lee Iacocca. Then it was part publicity stunt but partly him saying, “Hey, I’ve got skin in the game.”
Jobs was different. He came back to Apple along with his foundering but powerful NeXT operating system. He was rewarded with a buyout from Apple. He also had a huge number of Disney shares, which made him the largest individual holding, valued in the billions of dollars, made from selling Pixar to Disney for a pure share deal.
For Apple he was originally “iCEO” or interim CEO. He eventually dropped the “i” in the title but kept the “i” in the products to the “iTune” of billions of dollars in profit, sales and share value. The NeXT operating system powered Apple’s OS X and made the iMac a household word. The user interface, the look and feel were translated into the iPod. All that was learned in using NeXT OS and the human interface made the device a huge success. There were other devices before it, but none more elegant and human driven. This success grew and the
formula was repeated with the iPhone and iPad. Both device types existed prior but Apple did it better and more successfully than anyone else.
So for the $300 billion in company valuation and over $30 billion in cash reserves gained during the last 14 years or so, Jobs has been paid all of $14 for being CEO. Now granted he received reimbursement for any work related travel, including the fuel for his private jet, a gift from Apple worth about $90 million along with billions of dollars worth of shares in Apple which made him the single largest shareholder in Apple, but he created real value for his company. He grew the team, he helped grow them individually, and made our use of technology more efficient. In spite of growing the business to astounding levels, he never sold a single share and didn't receive any additional shares after 2003. He was the subject of a share backdating scandal, however it was said this was unknown to him and no charges were brought.
Imagine if all CEOs worked this way, earning only $1 plus reasonable CEO business reimbursement and shares for success. Their compensation would be directly tied to their performance. None of the bank CEOs would be compensated for losing billions of dollars. None would get millions of dollars for severance. Many would argue this would lead the CEOs to concentrate on share value and reduction of head count instead of applying best practices for growth.
Steve Jobs’ passing was noted for his many innovations. In fact, tech journalist Harry McCracken whose Technologizer.com is one of my favorite regular reads, pointed out that Jobs was, in fact, the Great Reinventor in an obituary he penned for Time Magazine. Link: http://www.time.com/time/
Jobs’ greatest gift was timing. It works for entrepreneurs, inventors and comedians, all of whom can work under similar pressure. He knew how best and more importantly, when best to implement a great idea original or reinvented. I recommend you read Harry’s article for greater insight into what made Jobs so special. I know from friends inside Apple that he could be very tough to work for, but in the end, those who bought in and stayed in were rewarded for their efforts.
Steve Jobs was not the first CEO to take $1 annual pay, that honor belongs to the man whose autobiography was read by nearly everyone and in the 80’s, Lee Iacocca. Then it was part publicity stunt but partly him saying, “Hey, I’ve got skin in the game.”
Jobs was different. He came back to Apple along with his foundering but powerful NeXT operating system. He was rewarded with a buyout from Apple. He also had a huge number of Disney shares, which made him the largest individual holding, valued in the billions of dollars, made from selling Pixar to Disney for a pure share deal.
For Apple he was originally “iCEO” or interim CEO. He eventually dropped the “i” in the title but kept the “i” in the products to the “iTune” of billions of dollars in profit, sales and share value. The NeXT operating system powered Apple’s OS X and made the iMac a household word. The user interface, the look and feel were translated into the iPod. All that was learned in using NeXT OS and the human interface made the device a huge success. There were other devices before it, but none more elegant and human driven. This success grew and the
formula was repeated with the iPhone and iPad. Both device types existed prior but Apple did it better and more successfully than anyone else.
So for the $300 billion in company valuation and over $30 billion in cash reserves gained during the last 14 years or so, Jobs has been paid all of $14 for being CEO. Now granted he received reimbursement for any work related travel, including the fuel for his private jet, a gift from Apple worth about $90 million along with billions of dollars worth of shares in Apple which made him the single largest shareholder in Apple, but he created real value for his company. He grew the team, he helped grow them individually, and made our use of technology more efficient. In spite of growing the business to astounding levels, he never sold a single share and didn't receive any additional shares after 2003. He was the subject of a share backdating scandal, however it was said this was unknown to him and no charges were brought.
Imagine if all CEOs worked this way, earning only $1 plus reasonable CEO business reimbursement and shares for success. Their compensation would be directly tied to their performance. None of the bank CEOs would be compensated for losing billions of dollars. None would get millions of dollars for severance. Many would argue this would lead the CEOs to concentrate on share value and reduction of head count instead of applying best practices for growth.
