U.S. CEOs, Athletes And Citizens Owe Steve Jobs Major Thanks

Though his ongoing illness made last week’s resignation less than surprising, the departure of Apple’s Steve Jobs from the innovator’s executive suite was and will remain big news. With good reason.

Jobs’ success speaks to the wonders of capitalism, a system built on incentives. Under capitalism, those who do the most to remove unease from the lives of others are rewarded handsomely, and Jobs’ billions attest to all that his success meant for others.

After that, a grand thanks is owed to Jobs by chief executives, professional athletes, and U.S. citizens more broadly. If this is doubted, read on.

Considering chief executives, Jobs’ brilliance as the head of Apple has redefined the upside possibilities for those in possession of the incredibly unique skills required to oversee companies. Thanks to the stupendous rise of Apple shares on Jobs’ watch since he returned in 1997, skilled CEOs will be able to command even greater salaries as a result.

Indeed, what’s perhaps not been stressed enough in the myriad testimonials to Jobs since his announcement is how very little he’s been paid by the corporation he’s so identified with. But for those who don’t know, Jobs returned to a near bankrupt Apple in 1997, yet upon his resignation the technology innovator was worth $350 billion.

Paid $1/year in salary, the vast majority of Jobs’ compensation came in the shares of the technology giant itself. Jobs’ Apple shares are worth $2.1 billion, but when we consider how very much his return meant to a company formerly on its back, Apple’s board short-changed him by a mile.

Commentators and politicians who perhaps should know better regularly decry CEO pay, but Jobs’ staggering success with Apple shows how very meaningful a skilled chief is to any corporation. They’re sometimes the difference between bankruptcy and immense wealth creation, though in Jobs’ case it’s doubtful that the CEO-pay ankle biters will be heard uttering the simple truth that in terms of his Apple pay, Jobs was exploited. Others will say not everyone is Steve Jobs, and that CEO pay should reflect just that, but then when he returned to Apple in 1997, Steve Jobs wasn’t Steve Jobs as Forbes contributor Nick Schulz has so articulately pointed out last week. Author of quite a few stupendous failures, Jobs arrived at Apple with questionable bona fides such that his pay package was doubtless deemed too generous by some.

Looking ahead, all economic acts are a speculation, and this applies to CEO compensation plans. Jobs has once again raised the bar of possibility when it comes to the impact corporate chiefs can have on company valuations, and the vital few with the rare skill set necessary to build and operate companies will be compensated handsomely as a result.

Some will earn their pay, some will of course underperform, and then some, like Jobs, will be vastly undercompensated. Needless to say, Jobs’ brilliant success is a reminder of how very important the man or woman running the show is to business prosperity.

Looking at professional athletes, in an indirect way what Jobs accomplished will accrue to them too. Much as a top quality CEO can profoundly change the fortunes of a founding company, thus making their arrival hard to put a price on, so can athletes, and for that matter, coaches.

[Source : forbes.com]