Apple tops in cap growth, bottom in CEO pay
Here's an interesting pair of lists.
On Seeking Alpha, Birinyi Associates' Cleve Rueckert lists the 40 S&P 500 stocks with the largest changes in market capitalization so far this year. Although other shares have scored higher percentage gains — some more than 100% — Apple (AAPL) tops this list on a total dollar value basis. Since Dec. 31, 2008, its shares have grown 35.9%, adding more than $27 billion to its market cap.
Meanwhile, the New York Times has published an eye-opening ranking of the pay of chief executives at 198 U.S. companies. The list, compiled by Equilar, is especially interesting because it posts, right next to the CEO's total compensation, his or her company's performance in terms of revenue, profit change and total return.
On this list, Apple CEO Steve Jobs, with his $1-a-year salary, comes in at the bottom, tied for last place with Richard Kinder, CEO of Kinder Morgan Energy Partners (KMP).
By contrast, Motorola's (MOT) Sanjay Jha took home $104.4 million in salary, bonus, perks, stocks and options in 2008 even as his company's delivered a -71% return on investment. He's followed on the NY Times list by Oracle's (ORCL) Larry Ellison ($84.6 million), Walt Disney's (DIS) Robert Iger ($51.1 million) and American Express' (AXP) Kenneth Chenault ($42.8 million).
At the bottom of Cleve Rueckert S&P 500 list is Exxon Mobil (XOM), which dropped nearly $58 billion in market cap last year, although its stock has only fallen 11.76% since Dec. 31. That pales next to Citi's (C) 57.53% decline, Aflac's (AFL) 54.08% and Bank of America's (BAC) 46.02%.
Market capitalization, a measure of a company's size, is calculated by mutiplying share price times the number of shares. Apple closed Monday at $118.45 with 890.55 million shares outstanding, for a total market cap of $105.5 billion.
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poor Rich Kinder wealth 4 billion owns about 30 to 40 % of Company. Company will make about 1.2 billion this year and he gets the % of that of the company he owns, Then he owns KMP stock company that is operated By Knight Inc. and has unit holders. I am sure he will make more then $600,000,000 this year on the low side.
I work for Kinder Morgan and the worker bees down below have had pensions cut for the year and lot of other things. no raises so they will still hit budget targets so kinder will get all his money poor rich, and wages compared with other companies doing the same thing we are $3.00 to $7.00 lower which in my case being with the company for over thirty years in the field it gets scary sometimes having to work with people that they have to hire that do not know on thing about Natural Gas, the part I work in. Safety can get real scarey.
Marc: spoken like a true soldier. Now take your rose colored glasses off, unless you need them to read KinderMorganWatch.org.
It is amazing to me how greedy and somewhat jealous we have become of these rich people. What we fail to realize is that these people took the risk or came up with an idea and capitolized on it. Steve Jobs had help sure, but it was still his risk, his idea, at least originally with the MAC. I work for Rich Kinder and even though there is waste everywhere throughout corporate America, I can tell you that he is very wise with his companies funds. No box seats for sporting events that I know of, no corporate jet. In fact I have heard stories from upper level staff that while some execs cash in frequent flyer miles to ride in first class that Rich Kinder has riden in coach while flying. These guys own stock in their companies because they started them and get paid well for how well they do unlike the CEO's of companies whose Board of Directors pay them for not having any ties to the company other than a huge paycheck. We all have seen these companies fail and fail again while the execs are making millions and their companies are laying of workers. Do you take better care of your own home and lawn and car than you do your nieghbor's or does you neighbor have to pay you to take car of their home ,lawn and car? I applaud them for their 1 dollar salary no matter how much they make off their stocks. If anyone doesn't like the way it works, start your own company or wait for a Fortune 500 company to offer you a CEO position. Our great country would be even greater if everyone would take ownership in everything they do.
Are we suppose to feel that they are more in-tune with the lower caste of worker because of a $1 salary? I don't. The $1 salary serves as an ethical ploy, a distraction from their true immense wealth. It serves as fodder for stupid jokes at company gatherings.
Don't feel too bad for them. They own millions of shares of their own stock with each share earning $4-$5 more each year, taxed at only 15%. The rich always get richer.
Gee, how much are the people in China who assemble the iPhones and iPods paid? And how do those wages compare with the Chinese minimum wage – are those workers able to get themselves and their families out of poverty? Are they making enough to afford an automobile? Just how much discretionary income do they have?
Now compare that income with the fact that there are no workers in the US manufacturing iPhones and iPods (six-foot tall guys like me have hands that are too big for such tiny hardware, I'm not complaining) and ask – what is the ratio of executive pay to worker pay? After all, the Chinese workers are not paying property taxes, social security taxes, income taxes, Medicare taxes, sales taxes, etc. etc. etc.
And are the executives of these companies even capable of working on factory asssembly lines, or are they not mentally capable of such kind of work? (i.e. too impatient, can't boss anyone around)
How will this country ever balance its budget if these highly-compensated executives don't pony up the money themselves?
And THIS is how CEO compensation is supposed to work, not the smoke-and-mirrors revenue other companies generated in order to award their CEOs hundreds of millions of dollars.
Steve has ALWAYS gotten $1 a year as his salary since his return to Apple in 1996. He says he gets paid in order to be on the company health plan.
Steve, when he was Pixar CEO got $50 a year as his salary.
Since Steve's return in 96, my recollection is that Steve has gotten one option grant, in 2001, which was later exchanged for shares, due to that whole option backdating problem. Apparently, he lost a fortune by exchanging his option for shares.
My recollection is that Steve got about $800M worth of Apple shares, from that option grant. A portion of those shares were sold in order to pay off the tax liability. Other than that Steve has never sold Apple shares since his return in 96.
If people want to average Steve's total compensation package over his whole time at Apple since 96, they are welcome to do so, but cherrypicking 2001's compensation, is just as bad as picking 2008's compensation.
Steve's wealth is mostly from his former ownership of Pixar, which was sold to Disney. At the time of sale, he netted about $3.4B in Disney stock.
Steve is wealthy, no doubt; however, attacking him for one option turned share grant in his almost 13 year tenure at Apple is silly, given the performance of the company.
I suppose I should mention the jet. Steve was compensated with a Gulfstream jet one year, and Apple picks up the expenses.
Fortune's estimate of the value of Steve Jobs' total compensation in 2001 has been taken to task many, many times.
A quick run down:
$381 million in stock options: considering the strike price was nearly the trading price the net cash value was only a very small fraction of $381 million estimated. If the stock price fell then the options were 100% worthless. Thus his compensation would have been ZERO from this. If the stock value went way up it would have been due to Jobs' leadership and work, not due to Apple "just giving it to him".
Notice no mention of the fact that he turned these options back in to Apple. He gave them back. (One of the main reasons he was completely exonerated by the SCC and FTC in the stock options scandals a few years later)
The "$90 million Gulfstream" was no such thing. While you could, at that time, pay $90 million for a fully tricked out, brand new Gulfstream, the one Jobs got was not a top end model and was bought used. While Apple has never disclosed what it paid for this jet, most estimates based upon public sales of similar used versions put the price at between $35 and $40 million with an absolute top of $45 million.
Was the total compensation for that year for Jobs excessive? Maybe. The net value to him was realistically in the $50-$60 million range (even including the jet). The counter argument is that Jobs lead the huge recovery of Apple over the prior 3 years. The market cap had gone up by about 1,000% during that time. (Apple is currently trading at almost 2,000% of the market cap it had when he came back.)
Also Job's TOTAL compensation was not just $1.00 last year (2008). He gets free care and maintenance of that jet (though he has to pay for all costs of use when he uses it for personal purposes). While that's not even 10s of thousand of dollars, it is NOT $1.00. Also he gets the full benefits package for employees at Apple (which is the reason he earns a minimum of $1.00 each year — so he can get the benefits package). Again, this is not a huge dollar value, but it certainly is worth a lot more than $1.00.
Steve Jobs is worth $3.4Billion according to Forbes. So he doesn't need to be paid by Apple. What he needs is for Apple and Disney/Pixar to be successful.
Gimme a break NYT! $1 salary and how many hundreds of millions in stock options? I would PAY millions in cash back to a company to give me a position with the amount of money that's worth.
What if ALL corporate officers' salaries were (mostly) replaced with stock:: inherently linking their personal gain with the company's (short- and long-term).
Might that not have affected some bankers' decisions in recent bubble-years?
Instead we have seen golden parachutes, which have been as *lead* to our country's economy.
Besides his $1 salary apparently Steve Jobs hasn't sold a single share of his Apple stock since his return to Apple over 10 years ago, (although some shares were deducted for tax purposes).
CEO pay is often nothing compared to CEO stock owned. E.g. Steve makes $1 in CEO pay, and has stock worth $1-5 billion. Let's see a list of CEO stock owned, which will tell another story.
I meant to also say that both Steve J. and Steve W. still have tons of stock in Apple and so the better Apple does the more they are worth also.
I am sure Steve Jobs is worth millions. To work for a $1 shows that he cares more about Apple's success than greed. It has taken a lot of changes and risks that have paid off to get Apple where it is today. The Macs do have problems like any other computer but there attention to detail, the environment and the customer makes them #1 in my opinion.
Would Steve Jobs work for free to save Apple? Would YOU work for free if you were Jobs? It's his creation, I'm sure he wants his legacy to be intact for many more decades.
If you are going to compare two ceo's, you need to compare them on a similar basis… I thought we all learned this in junior high school. You can't compare Steve Job's nominal $1 dollar SALARY to the TOTAL COMPENSATION (stock options, bonuses, etc..) of the other ceo's. I'm pretty sure he get's SOMETHING else other than his $1 dollar each year.
ex ped: Check out the link. That WAS his total 2008 compensation.
I'm really not sure how referencing an article from 8 years ago in any way is relevant to this article. What Jobs earned (as non-salary perks) in 2001 is not reflective of what he has earned since then. Apple has not bought him another jet, not given him particularly large numbers of stock options.
Perhaps finding a more recent article to reference would help solidify your point.
Perhaps the following article that was published by FORTUNE back in 2001 is more accurate.
http://money.cnn.com/magazines/fortune/fortune_archive/2001/06/25/305448/index.htm
–Apple's Steve Jobs got last year's mightiest pay package, valued by FORTUNE at $381 million. (For the purposes of calculating his 2000 package, we have valued his monstrous options grant at one-third the exercise price of the shares optioned. And, of course, we've included the $90 million Gulfstream the Apple board gave him.) How big is that? The last time the public got furious over CEO pay was in 1992, when reports of huge numbers for 1991 sparked a flurry of reform efforts. Yet the 14 highest-paid CEOs then, including such legendary mega-earners as Coca-Cola's Roberto Goizueta, Philip Morris' Hamish Maxwell, GE's Welch, and ITT's Rand Araskog, together earned less than Steve Jobs did last year all by himself (even without the plane!). Yes, it's true that Jobs has paid himself only $1 a year since he returned to Apple as CEO in 1997. And, yes, he deserves to be rewarded–handsomely–for bringing Apple back from the dead. But still…
Personally, all the comments in this section seem to be coming from people who frankly have no right or reason to comment on how much Steve has made or not made. Has Apple taken any "bailout" money from the U.S. Taxpayer? Ok so quite a few of Apple's products are made overseas (perdominately in China)! Have you looked around lately in the stores that you shop in such as Wal Mart? 85-90% of everything in Wal Mart comes from another country other than the U.S. Bottom line people it's real simple. If a company is successful, it's because they have good management and hell, lets reward them for good management! But when we start rewarding people for driving a commpany into bankruptsy and then condon loaning that same company billions in "bailout" money and keep many of the same people at the helm! What's wrong with that picture? And all of you are bitching about how much one man was paid for successfully managing a company from the brink of bankruptsy. Get a life people!