One of the bigger events last week was Google CEO Eric Schmidt resigning from the Apple board of directors. Back in May, Schmidt said he had no intention of stepping down from the board, despite the fact that the Federal Trade Commission was reportedly looking into the ties between the Google and Apple Boards, citing conflicts of interest regarding competing products. However, Schmidt stepped down late last week and we're only now learning the details of Mr. Schmidt's position.
Business Week today reports that a review of Apple's proxy filings with the SEC between 2007 and 2009 shows that, during the three years the Schmidt served as an Apple director, he accepted almost no pay or benefits. What he did accept was $8,712 worth of Apple equipment.
This information alone is nothing if we don't know what kind of money Schmidt was turning down, so let's paint some trees and hills into this picture. According to BW, Apple offers directors $50,000 a year at a rate of $12,500 per quarter. Aside from that chunk of change, they're also given the option to acquire 30,000 Apple shares, which vest over three years. Each year, directors are granted options to purchase 10,000 more shares in Apple, which vest immediately. On top of that, Business Week reports that as of fiscal 2008, directors on the Apple board are each offered a freebie whenever the company launches a new product, along with the chance to buy more of the same product at a discount.
So what did Eric do? Schmidt is said to have declined the retainer fee and the stock options, opting instead to buy Apple shares on the open market. In fiscal '08, Schmidt received $8,712 worth of Apple gear. The only directors to receive more were Al Gore and Arthur Levinson who got $13,161 and $8,923 worth of equipment respectively.
Why was Schmidt so happy to work for free (well, almost)? And how come he was so reluctant to leave the board in the first place? The questions, the questions...