Bloomberg News

Apple’s Jobs Resigns as CEO, Will Be Succeeded by Tim Cook

August 25, 2011

(Updates with Jobs’s pay starting in 12th paragraph. For more on Jobs’s resignation, see EXT3 <GO>.)

Aug. 25 (Bloomberg) -- Apple Inc. Chief Executive Officer Steve Jobs, who transformed the company he started at age 21 from a personal-computer also-ran into the world’s largest technology company, resigned.

Jobs, who will become chairman, was on medical leave since Jan. 17 after combating a rare form of cancer since 2003 and surviving a liver transplant in 2009. He is succeeded by Chief Operating Officer Tim Cook, 50, who has been running day-to-day operations.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs, 56, said in a statement yesterday. “Unfortunately, that day has come.”

Under Jobs, Apple became the second-most valuable company in the world, after Exxon Mobil Corp., by introducing devices that revolutionized the computer, music and mobile phone industries. His attention to detail and emphasis on sleek, easy- to-use products helped Apple repel competition from rivals as varied as Google Inc. and International Business Machines Corp.

“He’s always going to be remembered, maybe for the next 100 years, as the greatest technology business leader of our time,” Steve Wozniak, who co-founded Apple with Jobs, said in an interview on “Bloomberg West.” “Company culture doesn’t change overnight. He’s got tens of thousands of employees. The quality of the products reflects how good they are, too.”

Jobs’s Health

The day of the announcement, Jobs was in Apple’s Cupertino, California, office for the entire work day, and he attended a regularly scheduled board meeting, according to a person close to Jobs, who was not authorized to speak about the executive’s health. While Jobs has been housebound for the last few weeks and his condition is weak, the resignation was not indicative of a sudden worsening, this person said.

Jobs told the board he intends to be an active chairman, and he held an emotional meeting with his executive team afterward, according to another person familiar with the matter.

“Steve’s extraordinary vision and leadership saved Apple and guided it to its position as the world’s most innovative and valuable technology company,” Art Levinson, an Apple director, said in a statement on behalf of the board. “Steve has made countless contributions to Apple’s success, and he has attracted and inspired Apple’s immensely creative employees and world class executive team.”

Apple Shares

Jobs was ousted by the board in 1985 amid differences over strategy. In his time away, Jobs ran movie animation studio Pixar, which he later sold to Walt Disney Co., as well as NeXT Software Inc., which Apple acquired to return him to the company. Jobs is Disney’s largest shareholder, with a 7.4 percent stake, worth more than $4.4 billion. He will remain on the entertainment company’s board, a person with knowledge of the matter said.

When Jobs returned 12 years later, Apple had run up $1.86 billion in losses over two years. It was 90 days away from bankruptcy, Jobs would later say.

As of yesterday, Apple stock surged 9,020 percent since July 29, 1997, the day before the San Francisco Chronicle broke news that Jobs would be interim CEO. Over that period, the market value rose to $348.7 billion from $2.06 billion.

Salary of $1

Jobs gets an annual salary of $1 from Apple, and collects no bonus or compensation for his board membership. His pay is wrapped up in the 5.55 million shares he owns, which were valued at $2.07 billion as of today’s market close.

“The company believes Mr. Jobs’s level of stock ownership significantly aligns his interests with shareholders’ interests,” Apple said in a Jan. 7 filing with the U.S. Securities and Exchange Commission.

Apple shares fell $2.46, or 0.7 percent, to $373.72 at 4 p.m. New York time on the Nasdaq Stock Market. Any decline in the shares may be short lived, said Daniel Genter, who oversees about $3.7 billion as president of Los Angeles-based RNC Genter Capital Management.

“Jobs has been a strong figure in the company historically, but he hasn’t been a driving force for the past two years,” said Genter. “It brings clarity. It shouldn’t have an effect on the overall market, but this market is so skittish so it may have a short-term negative impact.”

Transformation

Since his return, Jobs has led Apple’s transformation into a seller of everything from smartphones to music. He engineered the company’s comeback by honing Apple’s industrial design, tightly integrating software and hardware, and pushing into new markets.

The iPhone, introduced in 2007, has become Apple’s best- selling product and turned the company into the world’s biggest smartphone maker. After winning customers away from Research In Motion Ltd. and Nokia Oyj, Apple is now sparring with Google for leadership in the market for mobile-phone software.

“Steve Jobs is a visionary in the computer industry,” Stephen Elop, the former Microsoft Corp. executive who became CEO of Nokia last September, said in an e-mailed statement. “We look forward to both Steve and his team having a positive impact on our industry for many years to come.”

While Nokia is still the world’s largest mobile-phone manufacturer by volume, its handset revenue was surpassed for the first time by Apple’s iPhone sales in the first quarter.

‘Hall of Fame’

“Under Steve’s leadership Apple has not only revolutionized the computer industry but also transformed how the world communicates, plays, shops and works,” said Frank Quattrone, CEO of Qatalyst Partners LLP, a Silicon Valley investment bank. “In the entrepreneur hall of fame, he is the charter member. He is, and will remain, an inspiration to the world.”

Cook joined Apple in 1998. As operating chief, his oversight included sales, manufacturing and distribution.

“The world will see in the next several years that Tim is a very uniquely gifted guy and Apple will be wildly successful under his leadership,” said John Connors, a venture capitalist at Ignition Partners, who serves on the Nike Inc. board with Cook.

--With assistance from Nikolaj Gammeltoft and Serena Saitto in New York, Dina Bass in Seattle, Mark Lee in Hong Kong, Diana ben-Aaron in Helsinki. Editors: Tom Giles, Jillian Ward.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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