Slashdot Mirror
Jobs Earns More Than A Buck A Year
The Only Druid writes "Well, though we've all heard about Steve Jobs only being paid $1 per year for being CEO of Apple, it turns out Apple pays him in other ways. He gets $1.2 million for renting the jet to them -- a jet that Apple bought for Jobs."
$1 a year for being the CEO.
$1.16mil for two years of jet renting
and even if you consider the $1.16mil to be a salary: $1.16mil for 2 years == not that much a year, compared to other major company's CEO's salaries.
Don't forget to think different.
I checked google and it seems the Gulfstream V has a direct operating cost (DOC) of about $1813.88 per hour. I'm not an executive so I don't know how often the plane is in use, but lets say 12 hours a day, 365 days a year, by multiple people.
If I did the math right, that puts the DOC per year at $7,944,794.40 (round that to $7.95 million). So if the DOC number is I calculated is correct, they're "saving" about $6.75 million a year.
But Apple paid $99 million for the plane. The whole point of buying instead of renting is that you get to sell your asset later on. If they were merely renting the plane for $1.2 million, that would be rather cheap. But you don't normally rent something that you've already paid for. The rental price is cheaper than the insurance/maintenance but Apple essentially lost $99 million when they gave the plane away. With the cost savings of $6.75 million a year for maintenance/insurance, they will have to rent the plane for almost 15 years to make up for the $99 million they lost when they gave the plane away.
Think about it, would you buy a house then give it to someone so you can rent it back from them? Even if the rental price is cheaper than the upkeep of the house, you no longer own the house!...but have you never sold or returned a present, to get what you really wanted?
So long as Apple would have otherwise rented a jet and Jobs pays taxes, fine. The airplane was originally reported as compensation (right?). If I were to question anything, it would be giving him the plane in the first place, although execs can negotiate pretty freely (the new post-Enron law did ban the multimillion dollar "loan" trick). Jets are often enough used for abuses on the company's tab -- golf "business" trips and the like -- as a way to provide disguised compensation and evade taxation.
Executive compensation gets pretty unbelievable. On the other hand, and unlike typical executives, without Jobs this mutlibillion dollar company would be dead, close to dead, or bought out. (Remember when Michael Dell said if he owned Apple he'd liquidate it to try to give shareholder something back?) Hmm, maybe not a bad quid pro quo.
Fortune Magazine does a nice business in tallying obscenity, check out year 2000.
One word: Taxes. This way, Jobs can write the $1.2 million off against his operating costs, resulting in zero profits. Jobs probably won't pay any taxes on that $1.2 million. He won't pay even pay FICA on that, either.
--Be human.
Steve owns a private jet (forget who boght it, the fact is it's his). His company feels they could use such a jet, so steve is going to rent it. And this is odd how?
T Money
World Domination with a plastic spoon since 1984
No, you're not wrong. Character counts; it's not everything, but it compensates for a lot. People deny it, and a lot of popular opinion is against the idea. However, the longer I live, the more I see that character counts.
The Independent: Reverend Spooner Arrested in Friar Tuck Incident - ISIHAC, Historical Headlines
But Clinton played into this rich versus poor thing at one time and made up some silly rules about executives who make more than 1 million in salary. The result? People like Jobs who have to earn their salary through rental of a jet. The result is also that many executives' salaries were reduced to 1 million and instead paid in stock and/or stock options. As you can imagne, this motivated many executives to do anything they could raise stock prices. Layoffs, shady accounting tricks, and companies incorporating in caribbean countries to get away from American government micromanagement is the result. (yes, the executives who did these things are of course ultimately responsible and not the person who motivated them to do it) Now, I am not slamming Clinton, he didn't have a crystal ball at the time to see the result. I do however thinks its none of anyone's business but the stockholders how much the executives make.
Never overestimate the end user. -jeramy b. smith
You mean the jet that costs Jobs money to maintain and use? You bet your ass he rents it to them, and why shouldn't he? Why should Jobs foot the bill for the use of his property? I realize that it seems odd that a CEO would rent his jet to the company he runs, but this is no Enron. Let's keep the overreacting to a minimum, shall we?
--Rick "If it isn't broken, take it apart and find out why."