Taking CEO Pay To New Heights

By David S. Jackson

Nobody can say Steve Jobs hasn't had a couple of good years. He brought Apple Computer back from the grave, and made the company not only competitive but also the most innovative personal-computer maker on the market.

Last week, Apple's board of directors demonstrated its gratitude. They granted Jobs 10 million stock options, already worth $200 million, and threw in $90 million to purchase and care for a Gulfstream V jet, perhaps to taxi the multidimensional CEO from his desk at Apple in Cupertino, Calif., to his other CEO job at Pixar Animation Studios, a few short miles across San Francisco Bay. "This guy has saved this company," says board member Edgar Woolard Jr., a former chairman of DuPont.

Under Jobs' leadership, Apple's market capitalization has risen to nearly $18 billion from less than $2 billion, and its stock has soared to $111 from $12. In its latest quarterly report, the company showed solid gains in revenues and earnings. "We shipped more Macs last quarter than in any other quarter in Apple's history," Jobs, 44, told TIME. "But I don't think we're through in any sense."

Jobs' supporters--and there are plenty--point out that before he took over, Apple's reputation had sunk as low as its stock. Today its colorful iMac portable and desktop models, which he hustled onto store shelves within months of his arrival, are highly profitable competitors in the cutthroat computer market.

Jobs' compensation history is unusual, to say the least. He's been working for $1 a year since he returned in 1997 to the company he co-founded. By then he'd already sold his Apple stock in disgust. Given all that, Woolard thinks the board got a bargain. "I tried to get him to take options when the stock was at $20 a share," he recalls, "and that stock today would be worth around half a billion dollars. So, yes, he's worth it."

Others aren't so sure. Executive-pay expert Webb Bassick of the Hay Group management-consulting firm says even a generous salary for someone at Jobs' level would be around $8 million. And given the total value of Jobs' package, which Bassick estimates at around $400 million, he figures Apple's board has paid for 50 years of service. Yet in an era in which fuzzy-cheeked Internet CEOs can rack up $100 million fortunes virtually overnight, how else could a board show its appreciation? Bassick says the jet illustrates a growing problem in today's high-tech world: "How do you motivate somebody who's got everything?" The jet, he admits, "was kind of a creative way of doing that."

Apple officials point out that Jobs will continue to draw his token $1-a-year salary. But next year, how are they going to top a GV? Perhaps with a small country.