Annual Apple report points to rewards for Jobs, rising expenses
Apple's latest 10K filing with the federal government reveals new company suppliers and supply concerns, major retail expansion, and that chief executive Steve Jobs has received multiple kudos from his company -- including a new iPod.
The regulatory filing with the Securities and Exchange Commission reveals that Jobs received his symbolic $1 salary during fiscal 2007, but also that the company is exploring the possibility of more direct rewards for his increasingly successful leadership role.
"Because Mr. Jobs's continued leadership is critical to Apple, the Compensation Committee is considering additional compensation arrangements for him," the filing says.
Jobs also took advantage of a 30,000 share grant provided to him shortly after his return in 1997, but did so only as the expiry date loomed. The surge in Apple's share numbers and stock value since the options were granted a decade ago gave the executive 120,000 new shares worth more than $14.6 million. He remains Apple's second-largest shareholder with more than 5.5 million shares and has never sold any of them, the company says.
Meanwhile, Jobs' personal but company-funded Gulfstream jet saw more traffic in fiscal 2007. Given to him by Apple in 1999 as a reward for his performance in the first two years of his return, the plane accrued $776,000 in maintenance costs for the period. That number is more than four times larger than the $202,000 in costs occurred during fiscal 2006 but considerably less than the $1.1 million in fiscal 2005.
Notably, Jobs did not receive a free iPhone (worth $379 to the company) like other Apple employees, but did receive an iPod worth $73 from the firm -- though whether it was a gift or a reward is unmentioned.
Overall, Apple's performance as a company in fiscal 2007 was stellar, having achieved sales of more than 7 million Macs worldwide and boosting its working capital to nearly $12.7 billion. As a result, expenses also increased and are likely to grow higher in the following year, the company says. Additionally, Apple notes that its income tax provision roughly doubled from $619 million to more than $1.2 billion between fiscal 2006 and 2007 and that it expects gross margins to drop in fiscal 2008 as the bulk prices for LCDs, NAND flash memory, and system RAM are expected to rise.
Some of the added expenses now and in the future are due to the rapid expansion of retail, however. The addition of new retail stores boosted the company's total retail leasing commitments from $887 million in fiscal 2006 to $1.1 billion in fiscal 2007. Many new and existing leases will last from anywhere between 3 and 15 years, the company says. About $400 million will be used in 2008 solely to expand the company's retail presence.
Steve Jobs' Turbo-Jet engine Gulfstream V dubbed "N2N"
The list of companies acting as component suppliers to the Cupertino-based electronics maker also grew in fiscal 2007 through the introduction of the iPhone, with communications chipset makers Infineon and Murata joining the company's list. The German firm Balda, which is believed to be manufacturing touch-screens for the iPhone and iPod touch, is not mentioned.
According to the report, Apple in fiscal 2007 also saw a major increase in its employee base. The number of full-time workers leapt from 17,787 to 21,600, most of which are new retail employees.
The regulatory filing with the Securities and Exchange Commission reveals that Jobs received his symbolic $1 salary during fiscal 2007, but also that the company is exploring the possibility of more direct rewards for his increasingly successful leadership role.
"Because Mr. Jobs's continued leadership is critical to Apple, the Compensation Committee is considering additional compensation arrangements for him," the filing says.
Jobs also took advantage of a 30,000 share grant provided to him shortly after his return in 1997, but did so only as the expiry date loomed. The surge in Apple's share numbers and stock value since the options were granted a decade ago gave the executive 120,000 new shares worth more than $14.6 million. He remains Apple's second-largest shareholder with more than 5.5 million shares and has never sold any of them, the company says.
Meanwhile, Jobs' personal but company-funded Gulfstream jet saw more traffic in fiscal 2007. Given to him by Apple in 1999 as a reward for his performance in the first two years of his return, the plane accrued $776,000 in maintenance costs for the period. That number is more than four times larger than the $202,000 in costs occurred during fiscal 2006 but considerably less than the $1.1 million in fiscal 2005.
Notably, Jobs did not receive a free iPhone (worth $379 to the company) like other Apple employees, but did receive an iPod worth $73 from the firm -- though whether it was a gift or a reward is unmentioned.
Overall, Apple's performance as a company in fiscal 2007 was stellar, having achieved sales of more than 7 million Macs worldwide and boosting its working capital to nearly $12.7 billion. As a result, expenses also increased and are likely to grow higher in the following year, the company says. Additionally, Apple notes that its income tax provision roughly doubled from $619 million to more than $1.2 billion between fiscal 2006 and 2007 and that it expects gross margins to drop in fiscal 2008 as the bulk prices for LCDs, NAND flash memory, and system RAM are expected to rise.
Some of the added expenses now and in the future are due to the rapid expansion of retail, however. The addition of new retail stores boosted the company's total retail leasing commitments from $887 million in fiscal 2006 to $1.1 billion in fiscal 2007. Many new and existing leases will last from anywhere between 3 and 15 years, the company says. About $400 million will be used in 2008 solely to expand the company's retail presence.
Steve Jobs' Turbo-Jet engine Gulfstream V dubbed "N2N"
The list of companies acting as component suppliers to the Cupertino-based electronics maker also grew in fiscal 2007 through the introduction of the iPhone, with communications chipset makers Infineon and Murata joining the company's list. The German firm Balda, which is believed to be manufacturing touch-screens for the iPhone and iPod touch, is not mentioned.
According to the report, Apple in fiscal 2007 also saw a major increase in its employee base. The number of full-time workers leapt from 17,787 to 21,600, most of which are new retail employees.
Comments
He remains Apple's second-largest shareholder with more than 5.5 million shares and has never sold any of them, the company says.
So who's the first? And that's cool that he's never sold any shares (but is that since his return, or since the beginning?)
? While there may be rising expenses there will certainly be a more profound rising of profits. After all, the R&D to sell 1M or 10M of same device stays the same. I just hope Apple will maintain user satisfaction as they become more popular and journey into new categories.
? Since privately owned aircraft start with a unique identifier of N, I wonder if N2N represents the first 3 alpha-numerics of Job's Gulfstream.
And that's cool that he's never sold any shares (but is that since his return, or since the beginning?)
I'd wager it's from his return. I think he sold quite a few shares to keep NeXT funded.
So who's the first? And that's cool that he's never sold any shares (but is that since his return, or since the beginning?)
The company is now also controlled by 30,336 shareholders, of whom CEO Steve Jobs is only second with over 5.5 million shares; the biggest investor is Fidelity Investments, which owns nearly 56.6 million shares.
So who's the first? And that's cool that he's never sold any shares (but is that since his return, or since the beginning?)
This is what the report states for owners:
Fidelity Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,583,870 (2) 6.49%
Steven P. Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,546,451 *
William V. Campbell. . . . . . . . . . . . . . . . . . . . . . . . . . . 112,900 (3) *
Timothy D. Cook. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,327 (4) *
Millard S. Drexler . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230,000 (5) *
Tony Fadell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288,702 (6) *
Albert A. Gore, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 (7) *
Ronald B. Johnson. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,450,620 (8) *
Arthur D. Levinson . . . . . . . . . . . . . . . . . . . . . . . . . . . 365,015 (9) *
Peter Oppenheimer . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,873 (10) *
Eric E. Schmidt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,284 (11) *
Jerome B. York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000 (12) *
All current executive officers and directors as a group
(14 persons) 8,352,396 (13) 1.00%
But according to my brokerage information, there are ten institutional owners including Fidelity with more than 10M shares.
edit:
The reported shareholders are just affiliated with the board in some way; it is listed under compensation. I think Fidelity is the only company with over 5%, which might warrant their inclusion even if there is no board position.
Im curious as to how Jobs lives day to day...
Like a Rock Star!!!
Like a Rock Star!!!
Hihihi...
No wonder he never buys new clothes!
Like a Rock Star!!!
Im curious as to how Jobs lives day to day if he only gets paid 1$ a yr does he just use his stock $$ to live off of? How exactly would would that work? I have some investments/ stocks but nothing like his. I could not really live off of them alone because they change day to day...
I think he has a stock pile of money already from the earlier Apple and NeXT days. Not to mention Pixar/Disney.
I, too, figure he has enough liquid to sustain to sustain his bills. Didn't he put all the money from Pixar into Disney?
As an aside, it's easy to say that a successful person merely got lucky, but Jobs has proven his ability to make something successful over an over again over 30 years.
Short list...
•*Seeing the genius of Wozniak's design (Wozniak was the initial genius but do you really think he would have made it more than a hobby without Jobs?)
• iPod (I saw the keynote, the audience was less than enthusiast. In other words, no one saw what Jobs vision)
• iPhone (The first half of 2007 was filled with someone saying Apple doesn't know a thing about making cell phones)
• The industry leading adoption of USB over Serial and Parallel ports (That may seem like I'm reaching now but without Apple it may have never become a industry standard)
• NeXT (Many call it a failure but who here can claim that they made a company worth 400M and getting 1.5M Apple shares after 11 years of operation. After all, OS X is based off those 11 years of innovative effort)
• The purchase of Pixar in 1986 for $10M (Jobs sold it 20 years later to Disney for $7.4B in stock)
• Apple retail stores (Dell and Gateway failed at it and now Apple retail stores are more profitable per square foot than every other retailer)
Im curious as to how Jobs lives day to day if he only gets paid 1$ a yr does he just use his stock $$ to live off of? How exactly would would that work? I have some investments/ stocks but nothing like his. I could not really live off of them alone because they change day to day...
Unless he reinvests dividends --likely not, as his share count
hasn't changed since the Pixar / Disney conversion.
If Apple were to declare a 1% dividend, '[email protected]' would
only make $9.2M extra per year -- perhaps this is how Apple will
invisibly increase executive pay.
This of course isn't surprising because he got his degree in Business Administration from Menlo College in Menlo Park in 1979. He didn't get hyper-rich from the Saudi Royal Family though interestingly enough. He built his hyper-fortune on a 30,000 loan and a loan against his (then meger) estate holdings for 300,000 dollars. His current net worth exceeds 20 billion dollars and just purchased one of the first A380's off the line to be customized to add to a fleet of aircraft which includes his custom 747. Sure you can always buy a 6500 square feet manson instead - but will it fly?
(Personal bias disclosure: and yes I support ostentatious living because of the jobs they support. A380's feed a shitload of people - and that's not counting the custom interior builders for aircraft - of whom my own semi-retired father does consulting work for.)
Disney's 1% dividend nets Jobs 45-46M per year
Is that the current value of his Disney stock or based on the original $7.4B in shares?
? Since privately owned aircraft start with a unique identifier of N, I wonder if N2N represents the first 3 alpha-numerics of Job's Gulfstream.
not just privately-owned aircraft, all aircraft registered on the US register have a tail number starting with N, it's a country code. And yes if you look at the picture, N2N is the tail number. And it really is registered to Steven Jobs too ..
not just privately-owned aircraft, all aircraft registered on the US register have a tail number starting with N, it's a country code. And yes if you look at the picture, N2N is the tail number. And it really is registered to Steven Jobs too ..
Thanks for the info. I couldn't figure out how to look up the data until I saw "tail number."
Im curious as to how Jobs lives day to day if he only gets paid 1$ a yr does he just use his stock $$ to live off of? How exactly would would that work? I have some investments/ stocks but nothing like his. I could not really live off of them alone because they change day to day...
This is how it's done, and it's a good way to handle your own finances as well. Incorporate yourself, and have all of your legitimate business expenses covered by your company... you!
This is how it's done, and it's a good way to handle your own finances as well. Incorporate yourself, and have all of your legitimate business expenses covered by your company... you!
Everyone thinks they're an MBA! This is the same regurgitated garbage I've heard through countless other sources. What you and many others (Rich Dad Poor Dad fanatics especially) fail to miss is the most obvious...which is the question which was asked:
Outside of his $1/yr salary, if he is not selling his stock, how then does he produce the income to cover his "personal" expenses? The home he lives in, the food he eats, his transportation, the clothes he wears, entertainment, etc are all personal expenses and not "legitimate business expenses". How does he get paid? The man must have a few dollars in his pocket at all time...where does that come from?
Incorporating yourself is a ridiculous concept and isn't possible. Incorporating your business (i.e. your income system) is different. Expenses incurred in the production of income are legitimate, sometimes deductible, business expenses. How you get to work, where you live, what you eat is your problem and are expenses of life (not business). Now there are certain circumstances where some of those expenses may be considered business expenses and therefore may be deductible.
So, how does the man get paid outside of stock which he isn't selling (no realized gain - no cash)? Does he rely on income from other sources? Does he receive dividends on any of his stock (i.e. cash)? How does he get paid to cover his personal expenses (you know the ones he couldn't show any proof that it's a legitimate business expenses)?
Incorporating yourself so that you can take advantage of special deductions doesn't exist. You will still be challenged by the IRS if your are audited and taxed on that "consideration" as regular income. Not to mention it's considered tax fraud. Of course the biggest flaw in that ridiculous notion is that you must have income to pay for expenses...so again where does that income come from?
Are you supposing that Apple or Disney/Pixar covers all his "personal" expenses? Or rather are you suggesting that Steve Jobs falls into the same group of clever individuals that incorporate "themselves" as a way to write off personal expenses as business expenses? In either case those expenses would be considered compensation to Steve Jobs on those companies balance sheet and Mr. Jobs would be responsible for paying income taxes on that income. Yet this article and the annual report for Apple make no mention of any other compensation.
Incorporating is great for what is was designed for...liability protection. It is not a "pay all my bills through this corporation so that I don't have any personal expenses and don't need any personal income and therefore don't have to pay personal income taxes" system. Sorry to break it to you but the IRS wouldn't agree with you on your theories.
So like the original poster I have the same question...how does Steve Jobs get paid?