The Back Page – L.A. Times Criticizes Steve Jobs’ Salary

The L.A. Times has taken its turn to rip on Steve Jobs’ compensations. This is getting so common place, I almost made this one my trademarked "blah blah blah" articles. I didn’t, though, so if you don’t care to read about yet another article using selective information to attack Steve Jobs’ salary, feel free to refer back to one of these:

• Fortune Attacks Steve Jobs’ Salary Using Sloppy Data – June 18th, 2001 (Back Page column)
  
• Jobs’ Salary Examined, Again – March 22nd, 2002 (TMO news article)
  
• CNN/Money Asks If Apple CEO Stock Grants Are "The Next Outrage" – April 24th, 2003
  
• Mirror Mirror, Who’s The Most Decadent CEO Of All? Steve Jobs, Of Course – August 11th, 2003 (Back Page column)
  

For three years, now, pundits and lazy journalists have taken pot shots at the way Apple pays its CEO. Why do I take issue with this? Is it because I am such an Apple apologist, or because I worship at the altar of Steve Jobs?

Hardly.

I take issue with these criticisms because they use selective information, innuendo, and half-truths to make a point that strikes a nerve with lots of people, that of excessive executive compensation.

So, let’s look at what the Times’ reporter, Kathy M. Kristof, has to say:

If you’re Steve Jobs, head of Cupertino-based Apple Computer Inc., there are several paths to riches — including stock options and the award of a Gulfstream jet.

This year it was stock grants that put Jobs on top in The Times’ annual survey of executive compensation at California’s 100 largest publicly traded companies. His earnings for 2003: $74.75 million, thanks to Apple’s decision to give him 5 million restricted shares of stock.

Jobs also earns $1 a week, or $52 a year, as CEO of Pixar Animation Studios in Emeryville, Calif. Jobs has not received substantial stock options or perks at Pixar, according to the company’s most recent proxy statement.

Grants of stock and options are fairly common for chief executives, of course, although the size of Jobs’ stock grants are noteworthy even in an industry that is generous with company shares. In 2001, however, Jobs’ pay package was truly unusual — a $43.5-million Gulfstream V jet and $40.5 million in "other compensation."

Now let’s look at the things she left out:

• Steve Jobs’ salary in 1997: US$1
  
• Steve Jobs’ salary in 1998: US$1
  
• Steve Jobs’ salary in 1999: US$1
  
• Steve Jobs’ salary in 2000: US$1
  
• Steve Jobs’ salary in 2002: – Effectively US$1
  
• Vesting period for the 5 million share stock grant: 3 years
  
• Total time period that the jet and the stock grant actually covers: 9 years.
  

She also did not look at the increase in shareholder value since Mr. Jobs came back to Apple. The simple math goes something like this:

Like I said, I have gone all over this before, but the facts bear repeating far more than the almost-story. What’s even worse is the fact that this is, as some weirdos in the Mac community like to scream at any opportunity, old news. The grant happened last year, and she also trots out some things from this year’s Apple shareholder meeting that took place back in March.

Blah blah blah…

It’s not as there is no room for discussion or dissent on Mr. Jobs’ compensation. Since he returned to Apple, he’s gotten some US$157.55 million in compensation, but when you count the vesting period, it comes to some US$17.5 million per year. That’s still a boat load — or perhaps a jet-load — of money, but it’s not the same as US$74.5 million in a single year.

If you think that’s too much money, say what you want to about it, but use the right figures. Or, if you are a lazy-ass reporter and you want to write a catchy headline about Steve Jobs making more money than god, do your homework and mention that he made six dollars for the other 6 years he worked. While you are at it, put a little footnote in about how much shareholder value he has created during that period.

If you want to be a curmudgeon, you can add something about Apple’s Mac market share plummeting during the same period, even as the iPod and iTunes have taken the music market by storm. That is certainly worthy of discussion, not matter how you feel about it.

The kind of stuff from Ms. Kristof, however, is little more than yellow journalism. I expect more from publications like Forbes, CNN, the LA Times, and Bloomberg’s publishing empire.

There is plenty of room for covering issues like this. Indeed, in an era where people like Ken Lay (former CEO of Enron) and Dennis Kozlowski (the creepy former CEO of Tyco) have stolen tens of millions of dollars from their shareholders, it’s important for the media to shine the spotlight on executive compensation. It’s just also important for the media to gets its facts straight.