Forbes this week got its hands on Steve Jobs’s deposition about back-dated stock options and the blogosphere is now citing his testimony as evidence of Jobs’s being undone by his loyalty to his team. In an essay titled “Steve Jobs on the Value of Stock Options,” TechCrunch’s Erick Schonfeld frames Jobs’s account as a disquisition on why talent should be paid in stock. It now sits at the top of Techmeme.
Erick does a fantastic job as usual picking out the juicy bits of the story and putting them in context. We all agree that options are the best way to pay executives, and it’s hard to imagine what grant Steve Jobs doesn’t deserve given Apple’s performance. But no matter how much we revere Jobs as an innovator, I suspect that the deposition will in time get The Full TechCrunch Treatment of acid-washed skepticism.
What first raised one of my gigantic, hairy eyebrows was Jobs’s claim that his initial motivation was only to get grants for the people he had worked with in the past. But Jobs’s pay would soon also be on the line. It’s common for a manager to “fight for his team” knowing that it sets a precedent for him or her to get an even larger grant.
In the deposition, Jobs presents himself as never suspecting he would be in that position, because he never thought he’d become Apple’s CEO again. No one has commented on this account, even though Jobs had once famously described the hiring of an Apple CEO beside himself as one of the greatest mistakes of his life.
When it came to his own pay as the CEO, Jobs describes the Apple board as a group of “peers” from whom he deserves “recognition.” This seems off-key. Yes the CEO is a board member, but he reports to the larger board as a subordinate not as a peer. For an unrivaled god such as Steve Jobs, thinking of the board as peer may seem like a generous act of collegiality, but it also opens Apple to cronyism. Even Jobs is accountable to someone.
Invoking “recognition” also is surprising to hear from the CEO of any investor-owned company. The board owes a CEO only what is in the best interests of shareholders. So far as Apple shareholders are concerned, Jobs undoubtedly deserves a gigantic grant. But when Jobs talks about recognition rather than compensation, it seems egotistical and almost petulant rather than market-driven.
I still don’t know why Steve Jobs got mixed up in a $20 million compensation dispute when his stake alone would later be worth much more than that. I’m sure pride had something to do with it, and rightly so.
For me this isn’t about Steve Jobs. My whole professional career, I have revered Jobs more than anyone, and still do. The money doesn’t matter to Jobs now, and we all wish him well during his leave. But what happened in this instance was wrong and what Jobs said about it is the same old baloney used to justify high pay and special rules for CEOs everywhere.
Let’s call a spade a spade: iPhones are good. Steve Jobs is a god. But this deposition was bad.