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Apple’s Bob Mansfield Shifts Work to Special Projects

July 29, 2013

Apple Says Bob Mansfield Shifting Work to Special Projects

Customers shop at an Apple Inc. store in Hong Kong. Photographer: David Paul Morris/Bloomberg

Apple Inc. (AAPL:US)’s Bob Mansfield, whose $85.5 million compensation made him one of the highest-paid U.S. executives in 2012, is stepping down as technologies chief to work on special projects.

“Bob will no longer be on Apple’s executive team, but he will continue to work on special projects,” Katie Cotton, an Apple spokeswoman, said by phone.

Mansfield, 52, requested the change so he could focus on creating new products without the distractions of being on the executive committee, according to a person familiar with the matter who asked not to be named because the information is private. He is the third executive to leave the top leadership ranks since the death of co-founder Steve Jobs in October 2011.

Mansfield presided over some of Apple’s toughest hardware-engineering jobs in the past decade, including a transition of its Mac personal computers to Intel Corp. (INTC:US) chips and development of the iPad tablet. He retired in June 2012 and returned about two months later, when Apple granted him a pay package that made him the second-best-paid executive at any Standard & Poor’s 500 company.

The management change comes as investors focus on whether Apple can come up with breakthrough new products to jump-start growth for the Cupertino, California-based company, whose revenue increased less than 1 percent in the most recent quarter. Apple has been developing a watch-like wearable device that would include features of the iPhone and other capabilities, people familiar with the matter have said.

‘Competitive Pressure’

Mansfield’s focus may now turn to wearable computing devices, according to Andy Hargreaves, an analyst at Pacific Crest Securities LLC.

“Apple is under heavy competitive pressure to create something new,” said Tim Bajarin, founder of Creative Strategies Inc., a technology consulting firm. “It would take someone like Mansfield to bring it out in a timely fashion.”

Mansfield leaves the nine-person executive council without one of the people who helped propel Apple’s rise to become the world’s most valuable technology company. Soon after Jobs died, retail stores chief Ron Johnson left to become chief executive officer of J.C. Penney Co. In late 2012, mobile software head Scott Forstall was pushed out.

Cotton declined to comment on whether another executive would take over Mansfield’s role as senior vice president of technologies, a position that was created for his return last year. Cotton also declined to comment on whether Mansfield’s compensation would be adjusted to reflect his departure from the executive committee. Apple declined to make Mansfield available for an interview.

Chip Strategy

Mansfield ran key areas of technology development, including wireless communications and a group charged with planning Apple’s long-term chip strategy. Since overseeing the change of the Mac’s electronic brain to work with Intel chips, the group has experimented with finding a single family of chips to run all of Apple’s products.

In late 2011, Mansfield pressured executives at Intel to make more energy-efficient processors for Apple’s Mac line or risk having the company use the same A-series chips that run iPhones and iPads, said a former Apple manager who worked for Mansfield at the time. The A-series chips are based on designs from ARM Holdings. (ARM)

Mansfield had a base salary of $805,400, with almost all of the rest of his $85.5 million pay coming from stock. The total was boosted by the value of a related accounting charge and options that vested earlier than other Apple executives.

Riccio’s Duties

His role as a manager will be difficult to fill because he was highly respected by computer scientists and chip experts in the company.

Some of them complained when they were reassigned to Dan Riccio, the senior vice president of hardware engineering, after Mansfield left last June, according to three people familiar with the sequence of events who asked not to be named because the matter is private.

The complaints were one reason why Apple CEO Tim Cook asked Mansfield to rejoin the company just two months later.

“Bob is the anchor of Apple’s hardware organization,” said Bob Borchers, a former Apple manager. “That’s why it was so important to bring him back.”

Building Bridges

Mansfield also has a reputation for building bridges between Apple’s sometimes myopic software, hardware and design operations. When Forstall left in October 2012, many insiders said it was because he was too focused on his own group. When Mansfield inherited some of his responsibilities, it was taken as a sign that Apple intended to make its Macs work more seamlessly with the company’s mobile devices.

“One thing I really respect about Bob is he really has the entire company’s best interests at heart,” former Apple manager Brett Halle said in an interview last year.

Riccio will probably take over Mansfield’s remaining duties and projects, said Hargreaves, the Pacific Crest Securities analyst.

“It shouldn’t be a total shock that he’s no longer on the executive team,” Hargreaves said. “The plan seems to be he’ll have more responsibility catered to whatever he wants to work on.”

Apple’s shares (AAPL:US) rose 1.5 percent to $447.79 at the close in New York. The stock has declined 16 percent this year, compared with an 18 percent gain in the S&P 500.

To contact the reporter on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net


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