BusinessWeek Looks Askance At Gore Appointment

by , 11:00 AM EST, March 27th, 2003

Alex Salkever, current author of Charles Haddad's "Byte of the Apple" column (Mr. Haddad is on leave), doesn't think too highly of Apple's newest Board member. Mr. Salkever piece, titled "Why Apple Shouldn't Vote for Gore," cites a number of reasons for why he thinks Al Gore makes a poor choice for Apple's board of directors, most of which center around the notion that Al Gore doesn't offer the appearance of an independent director. According to Mr. Salkever, Apple needs that independence. From the article:

With its stock price down over the past two years, the last thing Apple shareholders want or need is a celebrity director with zero business experience, aside from the business of fund-raising and politicking. Gore might make a wonderful contribution to Apple in some other capacity. But Jobs & Co. should think long and hard about the message it sends to shareholders with this appointment.

[...]

Over the past two years, Apple has declined to make clear the process by which Jobs is compensated. The board has put in place no clear triggers for his performance bonuses, something that's considered necessary in board-CEO relationships. Which may explain, in part, why Jobs got a $90 million jet in 2002, while his shareholders watched Apple stock sink from $23.46 to $14.55, a 38% decline.

According to Paul Hodgson, a researcher at The Corporate Library, this raises the question of whether Jobs is exerting undue influence over compensation policies. That violates a sacred principle in corporate governance: Executive-pay decisions should be made by directors shielded from meddling by top execs. Says Hodgson: "It sounds like an idea they cooked up among themselves, with Jobs in there telling them what he wanted."

Earlier today, we mentioned a piece by David Zeiler with comments from Needham analyst Charles Wolf, who has a much higher opinion of Apple's board. As for Mr. Salkever's thoughts, there is much more information in the full article at BusinessWeek's Web site.

The Mac Observer Spin:

Of all the reasons that have been listed by people displeased with the Gore appointment, Mr. Salkever's complaint that he isn't independent enough is the first well-reasoned argument, and that makes it refreshing.

That said, we question his reasoning. Apple may well need more independent directors, but that doesn't mean that Al Gore's political experience can't help Apple in today's tech-meddling political environment. That, for those keeping score at home, is why we think Mr. Gore can, in fact, help Apple. Dismissing Al Gore's potential to help Apple for the supposed sins of the current board seems capricious, at best.

We understand that your mileage is very likely to vary on this issue, but we ask that you to keep the conversation on-topic and polite. Out-of-control posts will be deleted.

BusinessWeek Article