Saturday, November 17, 2007, 10:30 am PT (01:30 pm ET)
Annual Apple report points to rewards for Jobs, rising expensesApple's latest 10K filing with the federal government reveals new company suppliers and supply concerns, major retail expansion, and that chief executive Steve Jobs has received multiple kudos from his company — including a new iPod.
The regulatory filing with the Securities and Exchange Commission reveals that Jobs received his symbolic $1 salary during fiscal 2007, but also that the company is exploring the possibility of more direct rewards for his increasingly successful leadership role.
"Because Mr. Jobs's continued leadership is critical to Apple, the Compensation Committee is considering additional compensation arrangements for him," the filing says.
Jobs also took advantage of a 30,000 share grant provided to him shortly after his return in 1997, but did so only as the expiry date loomed. The surge in Apple's share numbers and stock value since the options were granted a decade ago gave the executive 120,000 new shares worth more than $14.6 million. He remains Apple's second-largest shareholder with more than 5.5 million shares and has never sold any of them, the company says.
Meanwhile, Jobs' personal but company-funded Gulfstream jet saw more traffic in fiscal 2007. Given to him by Apple in 1999 as a reward for his performance in the first two years of his return, the plane accrued $776,000 in maintenance costs for the period. That number is more than four times larger than the $202,000 in costs occurred during fiscal 2006 but considerably less than the $1.1 million in fiscal 2005.
Notably, Jobs did not receive a free iPhone (worth $379 to the company) like other Apple employees, but did receive an iPod worth $73 from the firm — though whether it was a gift or a reward is unmentioned.
Overall, Apple's performance as a company in fiscal 2007 was stellar, having achieved sales of more than 7 million Macs worldwide and boosting its working capital to nearly $12.7 billion. As a result, expenses also increased and are likely to grow higher in the following year, the company says. Additionally, Apple notes that its income tax provision roughly doubled from $619 million to more than $1.2 billion between fiscal 2006 and 2007 and that it expects gross margins to drop in fiscal 2008 as the bulk prices for LCDs, NAND flash memory, and system RAM are expected to rise.
Some of the added expenses now and in the future are due to the rapid expansion of retail, however. The addition of new retail stores boosted the company's total retail leasing commitments from $887 million in fiscal 2006 to $1.1 billion in fiscal 2007. Many new and existing leases will last from anywhere between 3 and 15 years, the company says. About $400 million will be used in 2008 solely to expand the company's retail presence.
Steve Jobs' Turbo-Jet engine Gulfstream V dubbed "N2N"
The list of companies acting as component suppliers to the Cupertino-based electronics maker also grew in fiscal 2007 through the introduction of the iPhone, with communications chipset makers Infineon and Murata joining the company's list. The German firm Balda, which is believed to be manufacturing touch-screens for the iPhone and iPod touch, is not mentioned.
According to the report, Apple in fiscal 2007 also saw a major increase in its employee base. The number of full-time workers leapt from 17,787 to 21,600, most of which are new retail employees.
On Topic: General
- Apple CEO Tim Cook says privacy talks with Chinese government were 'very open'
- Former Apple exec Ron Johnson wants to make online shopping personal with new startup 'Enjoy'
- Apple says its 'ambitious' sapphire manufacturing process is 'not ready for production'
- GT Advanced to exit sapphire production business, Apple to recover $439M prepayment over 4 years
- Christian Bale confirmed to play Steve Jobs in upcoming biopic, to start shooting soon