Sunday, March 14, 2004

Steve Jobs' Concentration of Wealth

Title: Jobs' salary is top dollar
Source: MacWorld
Date: March 12, 2004

From the article:
    Apple's 2003 10K Annual Report shows that last March [Steve Jobs] received $74.75 million in restricted stock after cancelling his outstanding stock options.

    He was also awarded "five million restricted shares of the Company's Common Stock that generally vest in full on the third anniversary of the grant date".

    In 2002 he received options for 7.5 million shares and a bonus of $2.3 million. Jobs was granted no stock options in 2003.

    In 2001 Jobs received compensation in the form of a $90 million Gulfstream 5 executive jet. Apple agreed to pay for Jobs' use of the jet on company business, and in 2003 he racked up more than $400,000 in related expenses.
The article also notes that, "As has been the case every year since 1998 – the year after his return to the company – Apple CEO Steve Jobs has drawn an annual salary of $1".

What this article points out so clearly is that the "annual salary" of a CEO is irrelevant, because the salary makes up only a tiny portion of an executive's compensation. Besides the salary, the "compensation package" of a typical executive also includes the bonuses, the stock options, the stock grants, the private jets, the penthouse apartments, the yachts, the limousines, the parties, the vacations, the retreats, the benefits, the retirement packages, the pensions, etc., etc., etc. An unbelievable amount of money is poured upon corporate executives. As we will see in tomorrow's post, the amount being poured is obscene, and there is absolutely no reason for it.

In Steve Jobs' case, the items listed in the article total at least $200 million. And that is certainly not all of it.

There are approximately 100 million households in the U.S. What this means is that every household in America has paid Steve Jobs $2, on average, over the last couple of years.

If you do not own an Apple computer, you might think that your household has not paid anything to Steve Jobs. That belief is incorrect. Here is one way you have paid money to Steve Jobs: Many advertising firms use Apple computers. Those advertising firms paid inflated prices for their computers so that Apple could give Steve Jobs $200 million. The advertising firms passed the inflated cost of Apple computers on to their client companies, and those client companies in turn raised the price of their products. So, whenever you buy a tube of toothpaste, a box of cereal, or a new car, you pay an inflated price and your money flows to Steve Jobs. That is how the concentration of wealth works.

Steve Jobs is just one executive, and your household has paid him $2. You are funding thousands of immensely overpaid executives in exactly that same way every year. It adds up to thousands of dollars taken out of your pocket and poured into the pockets of the wealthiest Americans. If we stop the process, then you will have thousands of extra dollars in your own pocket to spend on the things that you and your family need.


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