The web is abuzz with instant replays of Thursday's revelation by the Wall Street Journal that recently deceased Apple board member Jerry York told the paper that he was "disgusted" with CEO Steve Jobs' secrecy over his health problems. "Frankly, I wish I had resigned then," York told the WSJ in an interview last year, shortly …
Don't be daft el reg
Yes, sure a governance model tends to favour board of directors as the doers as they tend to be the ones with legal responsibilities whereas employees tend to have more of a contractual obligation.
But that is not the only operational model.
It is perfectly okay for a board of directors to show its support and commitment to a CEO.
The CEO does not (in this method of operation) own or manage the board of directors merely that the board is so inspired with actions and inspiration of CEO that it takes leads from the CEO. It, the board that is, cannot and should not delegate responsibilities to CEO it merely acts with due diligence in supporting CEO lead initiatives.
His Billness of Gates.
An independent of mind would be perfeck for the Appleboard.
His Billness of Gates
I don't see why not.
Bill Gates has always been a big Apple fan. He rescued Apple in 1998 and I suspect that it is no coincidence that Microsoft is the largest developer of mac software outside of Apple.
BG knows to make money and has good business sense. We mightn't like what he does, but one does have to admire him for what he has done for Microsoft.
BG may also be the person to bring Macintosh to the little people.
You would hope so
"Bill Gates has always been a big Apple fan"
I would hope so, considering that Apple basically paid for MS to become the beastly behemoth we all love to hate,
Apple paid MS millions to have MS products written for the Mac, Gates told them it would all have to be done from scratch, but it took Simonyi about ten minutes* because he had written (or caused to be written) the apps in MS' bastardised portable P-Code system. Gates took the cash anyway and laughed all the way to the bank. Used to finance the expansion of MS.
*I can't recall the exact figure, but it was probably more than that really, you know what I mean.
re: His Billness of Gates
"Bill Gates has always been a big Apple fan. He rescued Apple in 1998 ..."
Nope, this isn't to say that the Microsoft investment in Apple was not a publicity coup that helped people to think Apple wasn't a dead duck, but saying Gates "rescued" the company is an overly simplistic explanation.
Those with long memories will recall that Microsoft was involved in a nasty anti-trust case at the time and helping "rescue" Apple, helped the company prove that it couldn't have a monopoly on personal computers because it did have - for want of a better work - competition.
"I suspect that it is no coincidence that Microsoft is the largest developer of mac software outside of Apple."
No, the reason why Microsoft was the the largest developer of non-Apple Mac software (I say was, because it doesn't produce much now) was that it was rather profitable and an annual revenue that was in 1998, if I remember rightly, $350m (which I think is the figure still trumpeted today). Back in 1998, if you bought a Mac with a copy of Office, Microsoft actually made more profit on the sale than Apple did.
I suppose you could say it's still one of the largest developers because of the 180 people they employ, though.
Apple paid Microsoft to make software ? When Steve Jobs announced that Microsoft would be porting Office to the Mac it was also announced that Microsoft were investing in Apple, to this day Microsoft own .05% of Apple, that money helped bail Apple out just before the iPod and iMac came along.
Doesn't sound like much of a bribe from Apple to Microsoft to me, Apple were nearly broke then and couldn't have bribed anyone.
Messy time ahead
If you're an Apple shareholder, you must get very very jumpy when you hear of Jobs' deteriorating health and megalomania (doubtless buoyed by dodging death) - the company is hanging off of the cult of one man, when he goes, the company will massively collapse I suspect. Sure, it won't vanish overnight, but I could imagine an unprecedentedly big share price crash
why Jobs kept quiet about why he was "taking time off".
Telling everyone he wasnt as well as he kept claiming was sure to push share prices down as everyone panics over his impending death.
re: Messy time ahead
"Sure, it won't vanish overnight, but I could imagine an unprecedentedly big share price crash"
Well, when there have been fake rumours about Jobs's dying or have a heart attack, the share price has gone down by 11%. You might remember Jon Stewart on The Daily Show ripping Jim Cramer for manipulating Apple stick by putting such rumours about.
As for Apple dying or living by Jobs, that's pretty much rubbish - an attractive idea for those that just see Apple as a cult, but it doesn't stand up.
Private company much?
Sorry to say so, but Apple has no legal or moral obligation to do whatever is proposed in TFA. If you don't like how Apple is run, don't hold stocks in it. End of story.
In fact, TFA is right
What the article states is that Jobs is basically running the company as if it were *his* company, as in "I own all the stocks", or as if it were a private company, not a publically-traded one. Yet another sign of his control fetiche showing its face.
I think that when Jobs leaves (or dies), Apple might stumble, but all the "control freak" stuff might go out, and *then* Apple will once more be a nice company. Currently, it seems like they turned into the very Big Brother they "attacked" in their famous '1984' video.
"Apple has no legal or moral obligation"
Oh yes it dose... It is not a Private company by the way, a private company is owned by someone, and a CEO of a company which has public stock has no right to act like this. He has built a cult around himself, and it is not going to end well.
It is not about selling stock, but about the obligationss a CEO has to the shareholders, which he is not fulfilling.
I'm sure various journalists and commentards understand corporate law as it applies to Apple a lot better than Steve Job's legal advisers do.
Re: Yeah, right
Well, going off the whole options backdating scandal (any convictions there yet, or is financial crime now unpunishable in the US?) I guess "Steve Job's [sic] legal advisers" still have a few lessons to learn.
"Yeah, right" to you and the whole "big corporation knows best" mentality, too.
I'm gonna enjoy ...
... shorting Apple stock when the time comes .
Short on knowledge...
er...wouldn't it be a bit late to short the stock once the time has come? You'd have to knwo in advance when he was going to die to short the stock off the back of a share price dive.
I'm really gonna enjoy ...
... taking the one-ups-manship out of context.
Jobs: Darn mine's short.
Balmer: Oh yeah ? Mines's shorter!
Elinson: Mine never was long, I just said that!
(to be continued)
Shareholder's penny wise but pound foolish antics have killed many a public company. If it ain't broke don't fix it, and so on.
For when apple come crashing down.
I am no fan, but no hater either, i own a mac and an ipod.
Two words.... Robert Noyce
Dear Rik Myslewski
Obviously you are not the type of person who creates a company with $40bn cash reserves. Giving it all away to shareholders is NOT the way to create a stable company capable of exploiting any area it sees fit. Mr Jobs has not done the company injustice and has proven time and time again that his way is better overall for the company , proven by the share price and company financial results.
You seem to be suggesting that he follow the "way it is done". Thats worked out great for so many other companies hasnt it ??!!!!!!
I thinks its great that Apple does it differently and more power to Steve Jobs for following a different path that is working while he is still alive.
We will all cease one day , but while he is still there hopefully he can empower and mould someone to follow in his path. I know i would.
Doing it different didnt work out too bad for him.
Applaud Mr Jobs for the good position that Apple is in today and not shoot him down for not doing it the way "its done" or how you suggest it should be done.
And as was said above, if anyone doesnt like it, simple, sell your stock. The rising share price must be a big burden for you.
He may not be following "The Way It Is Done", which actually does work out well for pretty much all other comapines, as long as the rules are followed, but he is following the CEO runs/owns the business and screw everyone else on the board model. This model worked out just fine for RBS/Fred Goodwin didn't it? (There are many other examples, but I'm actually at work so won't look them up...)
The only difference being RBS paid the largest dividend of any UK bank and made more charitable contributions than any other UK bank that I'm aware of. Apple deal with their corporate social responsibillity by doing nothing at all. Were I an Apple shareholder, I'd be selling because their boardroom has all the hallmarks of a large sucessfull company which could crash at any moment.
Hallmarks such as a $40bn cash pile vs operating costs of $5.5bn.
The commentards are really out in force today ...
Yes, the commentards really are out in force - RBS had plenty of cash to deal with the financial problems, right up until the then CEO managed to railroad the board into buying ABN Amro. So the fact that Apple has $40B of shareholders money hoarded away (rather than giving some of it back to the shareholders, like they should be doing) really doesn't matter if one person can push trhough his will without being held to account. The more power he gets and the less questions are asked the more vulnerable the company is to failure.
I'm actually at work so won't look them up
I was wondering why the posts on this topic all have spelling mistakes. More so than is normal for the Reg.
I wonder if this is a feature of replies to such topics?
Apple will die of cancer. You read it here first.
no .. it will be some kind of worm ...
OTOH, Ballmer hasn't killed MS yet
Maybe when Steve dies, hopefully later than sooner, Woz will come back and kill the company
(Risk and Success) EOR (Safety and Mediocrity)
I would say that most health issues are private matters, and companies are only get as much information from their employees as they need to plan for any inability to work.
I would also suspect that Jobs is perhaps a little paranoid and wants to hang on to the $40 billion just in case there's a period when the ideas fountain dries up for a while. Apple have historically been on the brink several times.
Finally it seems that companies do extremely well (or incredibly badly) when they have one leader with ambition and vision. Companies led by committee never seem to deliver stellar results. I think you have to choose between success (and the risk of failure) or safety and mediocrity.
Paris, for a "happy ending"
safety and mediocrity is a reasonable outcome - it may not pay so much so quickly for shareholders but it would imply a steady income. Workers benefit from stability.
People buy shares in companies to make money off them. Either by selling when the company value and its shares increase (whether that be short of long term) or by the payment of dividends on their investment. Companies sell shares to get money to operate to turn it into more money.
Not saying that Apple shouldn't keep some back for a rainy day, but most companies that build up large reserves without good reason are doing the shareholders out of their dues.
Its for the extortion racket
I mean the patent legal fund. They are developing a program to automatically assemble patents for every concept possible by combining a dictionary and an innovative random sampling algorithm. That should fund about 20 million patents.
---"I would say that most health issues are private matters, and companies are only get as much information from their employees as they need to plan for any inability to work."
Don't forget to block those Google cookies.
"but most companies that build up large reserves without good reason are doing the shareholders out of their dues."
I wish the bloody banks had had the decency to build up large reserves - then we wouldn't be facing cuts in public spending more savage than Thatcher imposed.
Re: (Risk and Success) EOR (Safety and Mediocrity)
Yeah, if you are a line employee that is true. Likely also true through mid-level management, possibly true for mid-level to the lowest rung of high-level. Once you get above that things start getting a bit dicey. The company depends on your decision making for its business model. To the extent that your health affects your decision making, your health affects the fiscal integrity of the company. Now, when you get all the way up to Jobs who, as other posters have noted elsewhere, is the sole source of innovative ideas at Apple, the connection between the future profitability of Apple and his health is pretty cut and dried: He dies Apple pretty much does too. At the very least it becomes just another mid-tier technology company, probably not even as important or profitable as HP or Dell. Corporate officers and the Board of Directors, at least in the US, have a legal obligation to disclose any reasonably foreseeable events which might affect profitability. Any reasonable person can see a clear correlation there, and I bet even some lawyers would too.
Jobs has been absent for long periods
He' s had several bouts of illness since 2004 and Apple has thrived without him. He's also the largest single shareholder of Walt Disney, so I can bet that he doesn't spend all his time at Apple. He's not the product designer either, though he undoubtedly plays a role in product refinement and recognising how the products can be marketed.
What I'm trying to say is that long periods away from managing Apple can and have occurred since 2004, so he's not completely essential to Apple.
What he has undeniably done for Apple, is to make a series of good judgement calls and business decisions when it really matters, and to ensure that Apple is recognised as a quality brand, and to ensure there is little advance information about what Apple is doing next so other companies can't head him off at the pass.
and yet he didn't resign
perhaps because of the following reasons:
Apple's board members are allowed 30,000 shares of the company stock, and the option to purchase an additional 10,000 shares each year.
Apple board members are also entitled to a $50,000 annual retainer fee, paid as $12,500 each quarter.
Apple's directors are entitled to one of each of the company's new products, as well as a discount on hardware purchases.
I wish Steve Jobs were running my company
I work at a well-known American corporation that was once one of the most innovative companies in the world, with a research division that was widely admired. Sadly, for many years now, the company's been run into the ground by lemmings who've never seen an industry trend that they wouldn't follow. Unlike Apple, we’ve blown several billion on gimmicks to raise our stock price and pay dividends -- then turned around and laid off engineers. When our president or CEO talks to the media, you hear a lot about returning value to our shareholders. Shareholder value is paramount here. In terms of the management priorities raised in the article here, my company is virtually Apple’s negative image. And we are literally mortgaging the company’s future in order to *seem* more profitable today.
Steve Jobs runs his company as if it were a private firm, and that is a very good thing. Shareholders are a fickle bunch; they don't give a damn about the quality of the products that are being made, they just want higher profits, and many really don't care how those profits are made. But they’re being mistreated if the CEO doesn’t disclose the results of his latest biopsy? That’s ridiculous.
The best thing Steve Jobs could do to protect his legacy is to use some of those billions to take the company private. Stop worrying about what the stupid shareholders might think, and focus on making the company as healthy as possible in the long term.
@Oregon Guy: "When our president or CEO talks to the media, you hear a lot about returning value to our shareholders. Shareholder value is paramount here."
Be afraid. When companies I previously worked for began to mention "maximizing shareholder value", it meant that they had no plans to innovate and were winding the company down. The CEO's chief concern was to remain employed as long as possible, while keeping the share price constant and the balance sheet balanced. This usually meant cutting headcount to make the quarterly profit/loss numbers (which usually ended up being near zero).
So that's what happened to all the companies that she denationalised?
As long as the CEO's decisions are paying off, he can do whatever he wants. And no one has been better at selling expensive plastic tat than Jobs has since his comeback.
Once he dies (he'll never resign) Apple will fade away again.
An Apple Director was disgusted.
He is dead.
Firstly, now we know what not only the Board, but Jobs *himself* are both affected by the reality distorsion field, and...
Even the board of directors are disgusted by Apple lock-in!
last time, gates bailed apple out with a rather large cheque. will it be ballmer this time? that would make the fanboi's eyes water, huh?
Bring back Gil Amelio!
Read his book, "A Big Boy Did It And Ran Away: My 500 Days At Apple".
Yes, Apple should definitely be run by the board
after all, that model worked out so well for them last time around. Oh, wait...
"it's becoming increasingly clear that at Apple the CEO calls the shots,"
Becoming ? When was it ever not clear that that was the case ? Or rather, when was it ever not clear that Apple is Steve Jobs' personal vehicle for delivering his one true vision of the way we should compute ?
Jobs is a micro-managing sociopathic control freak, and inside Apple he has ALWAYS called the shots, even when he wasn't the CEO and the actual CEOs have tried to keep him out of the way. Christ, even when he stropped off to found NeXT you can bet he had an eye on coming back and staging the coup to make Apple his again and make them do things HIS way.
Anyone who is only just becoming aware of this fact has not been paying attention at all for the last thirty or so years.
"And that's exactly the opposite of the way corporate governance is intended to function. A company's CEO is supposed to serve at the pleasure of the board and to answer to the company's investors - not the other way around."
Yes, that's the theory. In theory, theory is the same as practice, but in practice it isn't. Stopping board members from interfering is an art unto itself, and a widely practised one at that. Jobs has an easier time of it than most people who have to deal at board level, because a) he got pick the team. and b) he is a notoriously charismatic sociopath. Or so they say, it doesn't come across in his public appearances.
"might become an autocracy"
Might ????? Nope, to late, it's been to late since at least 1997. It's probably been to late since 1976.
I don't see the problem
The board of directors can dismiss the CEO whenever they want but why should they? The CEO might be calling all the shots but he's also delivering results, and that's what matters.
Re: Why should they?
Because the BoD is responsible to the shareholders and not the CEO. If the BoD is not exercising its fiduciary responsibility to the shareholders, the company is open to a lawsuit from a disgruntled stock owner.
Maybe I should go buy some shares and then file a lawsuit
A man of principles.
"Apple board member Jerry York told the paper that he was "disgusted" with CEO Steve Jobs' secrecy over his health problems."
And upon discovering the truth, Jerry York boldly did, er, f*ck all. What a great loss to the world of business.
Say what you like about Steve Jobs—most people do—there's a lot to be said for running the company like the captain of a battleship. Business is war. You don't win wars by constantly bickering on the bridge of the flagship and demanding voting rights.
There was a time when shareholders' opinions mattered, because, back when the concept was invented, most shareholders would have had at least some understanding of what the business did to earn its profits. Today, this is simply not the case: shares are just a form of proxy currency and the shareholders are only interested in making a fat, *short-term* profit.
Floating a business on the stock exchange today is just a way to obtain a loan on execrable terms, with a lot of strings attached. It's essentially the kiss of death for many businesses, because too many shareholders (and CEOs) insist on fattening up the goose today, without any care for its long-term health of future business prospects.
So, Steve Jobs is a micro-managing sociopathic control freak? Who cares? Nobody's asking you to go out on a date with the guy.
I never said ...
"So, Steve Jobs is a micro-managing sociopathic control freak? Who cares? Nobody's asking you to go out on a date with the guy."
... that it was necessarily a bad thing. Probably what makes him such a successful CEO, in fact. The most successful CEOs and directors I've ever met have been very similar, although usually less the mythical charisma and plus some bad suits.
Paying dividends when the shares are up?
and when you're entering into a war with Google and Microsoft?
What would worry me, if I was an Apple shareholder, is the fact that all of Apple's killer products seem to be creations of its CEO, who doesn't come across as the type to appreciate other people's ideas.
If/When Jobs leaves, will Apple have anyone else to innovate?
History tells us no.
It would seem that Jerry York had worse health problems...
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