Apple CEO Takes $1 Salary in 2007

By Jordan Robertson (Thursday, January 24, 2008)

SAN FRANCISCO - Apple Inc. Chief Executive Steve Jobs continued his tradition of taking home only $1 in salary in 2007, when he also gained $14.6 million on paper by exercising stock options that were about to expire, according to a filing with the Securities and Exchange Commission.

Jobs has taken a $1 annual salary since returning to the Cupertino-based company in 1997 and has hoarded his shares of Apple stock since then, accumulating about 5.5 million, according to Apple's proxy report filed Wednesday with the SEC.

The value of Jobs' stock has taken a beating over the past month, however, as investors have retreated from Apple shares amid fears of slowing consumer spending and a recession in the United States.

Since Apple released a disappointing second-quarter forecast after the close of trading Tuesday, Apple shares have plunged almost 11 percent. That drop lopped $15 billion from the company's market value and trimmed the value of Jobs' stake by more than $90 million to a total of around $765 million.

Apple stocks closed down 11 percent, or $16.57, at $139.07 Wednesday, climbing back from a more serious decline earlier in the day as technology stocks staged a late comeback.

Jobs did not pocket the profit from the 120,000 stock options he exercised in 2007, Apple said in the regulatory documents. The options — granted to Jobs for his service on Apple's board of directors — were set to expire in August 2007 so he exercised them and held on to all of the shares.

Apple valued the exercise of those options at $14.6 million, which indicates the difference between the price Jobs was able to buy the shares for and the price of Apple's stock the day of that purchase.

Options give employees of a company the right to buy shares of their company's stock in the future at a set price. They can be extremely lucrative if the stock price appreciates substantially, which boosts the recipients' windfall.

Jobs currently has no un-vested equity awards. Apple noted in the documents, however, that its board of directors is considering ways to provide Jobs additional compensation because of the importance of his continued leadership.

After he returned to the company he co-founded more than 20 years earlier, Jobs' bonus in 1999 for engineering an impressive turnaround was a $90 million Gulfstream V jet, whose operation Apple still helps pay for.

Under a reimbursement agreement, the company repays him for the expenses of operating his private plane when it is used for company business, an arrangement that cost Apple $776,000 in 2007, according to the filings.

Originally appeared in Associate Press and Yahoo.