Will Steve Jobs depart empty-handed?

August 25, 2011

We’ve got a soft spot for Apple (AAPL) here at footnoted — the very first blog post Michelle wrote for the blog, almost exactly eight years ago, was about option exchange programs at Apple and other companies.

So last night’s news that Steve Jobs was stepping down, for good, as chief executive of Apple, to be replaced by Timothy D. Cook, marked the end of an era here as well as for Apple and its fans. (See Jobs’ resignation letter, and Apple’s press release.) Like many Apple-watchers, wonder whether Jobs has injected enough of his DNA into the company to keep it thriving (to paraphrase Guy Kawasaki‘s comments to the New York Times).

But we also decided to look back and see what Jobs is likely to take with him when he steps down, in the way of retirement benefits, severance and the like. The answer: not much.

That’s small surprise to anyone who’s paid attention to his pay in recent years. Jobs has famously been paid just $1 a year in salary since 2003 — and nothing else, whether equity, perks or pension. The nominal $1 salary is more common these days, but mostly among execs facing a tough economy or presiding over big layoffs, to show solidarity with the troops (or just generate some good press). But Jobs has done it even in the absolute best of times: Apple shares have risen more than 3,000% since early 2004, more than 130 times the Nasdaq’s return in the same period.

Jobs does own something like 5.5 million shares of Apple stock — less than 1% of outstanding shares, but still a whopping $2.09 billion at yesterday’s close. That means that the stock’s 5% drop in after-hours trading cost Jobs about $106 million (though AAPL is down less than 2% this morning). As Apple’s proxy put it in January,

“The Company believes Mr. Jobs’s level of stock ownership significantly aligns his interests with shareholders— interests…”

Otherwise, however, Jobs has no employment agreement. No severance agreement. No change-in-control agreement. No gold-plated pension or lifetime health benefits. That’s as of Apple’s most recent filings: Jobs and Apple may even now be hashing out some lavish retirement agreement. We’ll see.

There is the jet. Apple has helped foot the bill for Jobs’ personal plane in recent years, when he uses it for business. That comes out to $248,000 last year, or $1.1 million over the last three years. And the $40-million jet itself was a gift from an appreciative board back in 2000. It will be interesting to see if Apple continues to pay him for his business flights as chairman-and-not-CEO. (For a look at Apple’s less clear-cut record on corporate governance, see Joann Lublin and Scott Thurm’s piece in today’s Wall Street Journal.)

Cook, the incoming CEO, is a little more prosaic, both in his manner and in his pay. He has been getting a salary ($800,016 last year) and cash bonus ($5.9 million all told last year, most of it for serving as interim CEO), plus $52.3 million in equity. It’s about double what he made in 2008 (and many times the $1.6 million total compensation he received last year). Presumably his employment agreement will be updated along with his permanent title. Stay tuned.

We said we had a soft spot for Apple, but that doesn’t mean we’ve been soft on the company in our posts. Since that fateful first post, Michelle has dinged Apple for whining about options expensing, chronicled her frustration with her first iPhone (reminding us all that even Apple’s biggest products aren’t necessarily instant hits), looked at Al Gore’s swag and Eric Schmidt’s nonexistent board pay, flagged it when Apple called 2008’s lousy economy “depressed,” called the company on impenetrable legalese (and was later vindicated when some readers groused), pointed out Apple’s mastery of the media (and the filings) the first time Jobs stepped aside for health reasons — and again the second time — and noted in passing that Jobs continued to pass up pay as a director of Disney (DIS).

In April, we took a stroll through Apple’s 10-Q, which showed Jobs was flying less, and elevated the importance of Apple’s mobile business while downplaying the “creative markets” that helped the company become a powerhouse. Most recently, in June, we footnoted about CEOs at other companies making sure they get to keep their company-issue iPads when they get the boot.

In any case, we’ll miss Jobs, both for the always fascinating vision he’s had for Apple, and for the weird combination of understatement and sheer audacity he brought to the company. Consider, for example, his 49-word bio in Apple’s most recent proxy:

“Steven P. Jobs is one of the Company’s co-founders and currently serves as its Chief Executive Officer. Mr. Jobs also has been a director of The Walt Disney Company (‘Disney’) since May 2006. His experience includes over a decade of leading a high growth technology company.”

Oh, and he’s among the most successful CEOs of all time. Now consider somewhat less humble final paragraph of the press release announcing Jobs’ departure:

“Apple designs Macs, the best personal computers in the world … Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices.”

We wish Jobs well. As for Apple, we think it will be OK, at least for a while.

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