I just read today that the new CEO of Apple Inc has a starting pay of $378 million per year. That is $189,000 per hour. He probably does not get any overtime pay. Imagine what it costs the company for him to go to the men's room or to take a coffee break! If he was walking down the street in the Fall and the leaves were hundred dollar bills Apple could not afford for him to stop and pick them up. He would have to keep walking.
There are two things at play here. Ability relative to anyone else is not it. Knowledge is not it.
1. Apple has enough revenue that this pay as a percentage of revenue does not make much difference. On a per share basis the stockholders do not even see it. If what you are selling is a fixed cost item to your customer it can often be sold at a higher price. If you are selling packaging material you will be beat down unmercifully on price. If you are selling business cards or advertising material, made with the same type of equipment as the packaging material, you can get a much higher price. Remember this when you are the buyer.
2. This man's real ability is that he can make a deal like this. That ability may or may not translate into growth. He of course did not build Apple. He happened to come along at the right time. When we leave a job where we have built the business we see someone "enter into our labor" and maybe start at a higher salary than we were getting. This is why we should be the owner of the business and not an employee.
David Sneed
There are two things at play here. Ability relative to anyone else is not it. Knowledge is not it.
1. Apple has enough revenue that this pay as a percentage of revenue does not make much difference. On a per share basis the stockholders do not even see it. If what you are selling is a fixed cost item to your customer it can often be sold at a higher price. If you are selling packaging material you will be beat down unmercifully on price. If you are selling business cards or advertising material, made with the same type of equipment as the packaging material, you can get a much higher price. Remember this when you are the buyer.
2. This man's real ability is that he can make a deal like this. That ability may or may not translate into growth. He of course did not build Apple. He happened to come along at the right time. When we leave a job where we have built the business we see someone "enter into our labor" and maybe start at a higher salary than we were getting. This is why we should be the owner of the business and not an employee.
David Sneed
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