Jobs earns $1; Apple stores forecast loss
Cupertino, Calif.-based Apple once again gave its founder and CEO a symbolic salary for its fiscal year, which ended in September, according to a new filing with the Securities and Exchange Commission. Jobs likewise earned $1 in salary in 2000.
The company also reported in the SEC filing that its newly opened chain of retail stores will likely post a slight loss in fiscal year 2002. Earlier, Apple said it expected the more than two dozen stores to break even in the first fiscal quarter of 2002, which ends this month, and to achieve a slight profit for the full fiscal year.
Among other items disclosed in the filing, Apple said it anticipates capital spending of $200 million as it opens an unspecified number of retail stores, boosts its information technology infrastructure and replaces existing assets. On the research and development front, the company's R&D spending totaled $430 million in fiscal 2001, up 13 percent from 2000. And for fiscal 2001, Apple said net sales attributed to its online store were about $2 billion.
Fiscal 2001 wasn't among Apple's best years. The company's revenue slid to $5.4 billion in fiscal 2001, down 34 percent from the $8 billion culled in 2000, and less than the $6.1 billion reported in 1999. Earnings swung from a profit of $786 million in 2000 to a net loss of $25 million in 2001. Nearly all product segments and geographic markets declined in 2001.
However, Jobs' low salary isn't a reflection of Apple's tough year. Instead, it reflects a policy of giving the flamboyant founder novel performance awards.
In Apple's fiscal year 2000, for instance, the company decided to give Jobs a Gulfstream V jet worth $43.5 million, as well as $40.5 million to pay for the taxes and other costs associated with granting the plane. Apple's board of directors voted to award the plane to Jobs in December 1999, but it was only delivered in fiscal 2001 and thus wasn't counted in his compensation until then, according to the SEC filing.
Jobs co-founded Apple in the 1970s but left in 1985 after disagreements with the board. He returned in December 1996 when Apple, in a surprise move, purchased Next Software--another company founded by Jobs. Although he initially played a peripheral role, Jobs became Apple's interim CEO in the summer of 1997 when the company ousted then-CEO Gil Amelio. Jobs later became permanent CEO.
In fiscal 2000, Jobs received 20 million stock options, or more than 5 percent of the outstanding shares, at a split-adjusted price of $43.56 a share. Not only was the exercise price $3 lower than the average Apple option given to employees that year, but also all 20 million shares (calculated pre-split) vested by July 2001--or more than twice as fast as normal Apple options. The exercise price of Jobs' options, though, exceeds the market value of Apple stock, which hovers in the low $20s.
Although Jobs did not receive any additional stock options in fiscal 2001, other key Apple executives did. Each receiving one million options at an exercise price of $16.81 were Fred Anderson, chief financial officer; Tim Cook, senior vice president of worldwide sales; Jon Rubenstein, senior vice president of hardware; and Avi Tevanian, senior vice president of software engineering. Each also received a salary in the range of $400,000 to $660,000.
Like other PC companies, Apple endured a tough year. Following double-digit growth in fiscal year 2000, the company saw double-digit declines in 2001. U.S. sales, for instance, dropped 30 percent to $3 billion in fiscal 2001. Sales in Japan dropped 47 percent to $713 million, after rising 57 percent in fiscal year 2000. Sales of iMacs declined 45 percent, from $2.2 billion to $1.2 billion. Only the iBook, the company's consumer portable, saw sales rise and that was partly due to an overhaul of the line.