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from Chapter 34
Among Jobs’s quirks was his attitude toward money. When he returned to Apple in 1997, he portrayed himself as a person working for $1 a year, doing it for the benefit of the company rather than himself. Nevertheless he embraced the idea of option megagrants—granting huge bundles of options to buy Apple stock at a preset price—that were not subject to the usual good compensation practices of board committee reviews and performance criteria.
When he dropped the “interim” in his title and officially became CEO, he was offered (in addition to the airplane) a megagrant by Ed Woolard and the board at the beginning of 2000; defying the image he cultivated of not being interested in money, he had stunned Woolard by asking for even more options than the board had proposed. But soon after he got them, it turned out that it was for naught. Apple stock cratered in September 2000—due to disappointing sales of the Cube plus the bursting of the Internet bubble—which made the options worthless.
Making matters worse was a June 2001 cover story in Fortune about overcompensated CEOs, “The Great CEO Pay Heist.” A mug of Jobs, smiling smugly, filled the cover. Even though his options were underwater at the time, the technical method of valuing them when granted (known as a Black-Scholes valuation) set their worth at $872 million. Fortune proclaimed it “by far” the largest compensation package ever granted a CEO. It was the worst of all worlds: Jobs had almost no money that he could put in his pocket for his four years of hard and successful turnaround work at Apple, yet he had become the poster child of greedy CEOs, making him look hypocritical and undermining his self-image. He wrote a scathing letter to the editor, declaring that his options actually “are worth zero” and offering to sell them to Fortune for half of the supposed $872 million the magazine had reported. |
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