Sculley Resigns From Pepsico to Become Apple Computer Chief

The Wall Street Journal

April 11, 1983

ON FRIDAY, APPLE COMPUTER INC. NAMED JOHN SCULLEY PRESIDENT AND CHIEF EXECUTIVE, AND SAID IT WILL PAY HIM AT LEAST $2 MILLION THE FIRST YEAR.

HIS RESIGNATION LAST WEEK FORCED A REORGANIZATION OF PEPSICO INC.'S SOFT-DRINK BUSINESS, WHICH SCULLEY HAD RUN AS PRESIDENT OF PEPSI COLA CO., AND STARTLED THE INDUSTRY. IT ALSO DISAPPOINTED DONALD KENDALL, PEPSICO CHAIRMAN, WHO CONSIDERED SCULLEY A POSSIBLE SUCCESSOR. IT MARKS THE END OF AN 18-MONTH SEARCH BY APPLE TO FIND A REPLACEMENT FOR 41-YEAR-OLD A.C. "MIKE" MARKKULA JR., WHO PLANS TO RETIRE FROM THOSE POSTS, REMAINING AS A DIRECTOR AND CONSULTANT. STEVEN JOBS, 28, REMAINS AS CHAIRMAN.

SCULLEY SHOULD GIVE SIX-YEAR-OLD APPLE MORE FIREPOWER AS COMPETITION IN THE PERSONAL-COMPUTER BUSINESS HEATS UP. CHOOSING SCULLEY IS "ONE OF THE MOST IMPORTANT DECISIONS IN APPLE'S HISTORY," SAYS JOBS.

APPLE HAS AGREED TO PAY SCULLEY A $1 MILLION BONUS WHEN HE STARTS, $1 MILLION IN SALARY AND BONUS THE FIRST YEAR AND $1 MILLION IN SEVERANCE PAY IF HE LEAVES. HE ALSO GETS A PACKAGE OF "WEALTH CREATION" BENEFITS, INCLUDING OPTIONS ON 350,000 SHARES OF APPLE STOCK AND FINANCIAL HELP IN BUYING A $2 MILLION TUDOR-STYLE HOUSE WITH A KIDNEY-SHAPED POOL IN WOODSIDE, CALIF.

MONEY WASN'T THE PRIME MOTIVATION, SCULLEY SAYS, BUT "ONCE I LEFT THE SECURITY OF PEPSICO AND WENT TO THE OTHER SIDE OF THE COUNTRY TO AN INDUSTRY I DIDN'T KNOW, I KNEW IF I WASN'T SUCCESSFUL, I'D HAVE A TOUGH TIME COMING BACK." AT PEPSI THIS YEAR, HE SAYS, HE WOULD HAVE EARNED ABOUT $500,000-LAST YEAR HE EARNED $317,500 IN SALARY AND BONUSES, ACCORDING TO PEPSI'S PROXY STATEMENT.

SCULLEY BELIEVES APPLE MUST BECOME A BIGGER FACTOR IN THE MARKET FOR SMALL OFFICE COMPUTERS, SELLING WHOLE SYSTEMS RATHER THAN INDIVIDUAL UNITS. "IBM IS ALREADY ESTABLISHED WITH CORPORATE AMERICA, SO IT'S A REAL CHALLENGE," HE SAYS.

MARKKULA SAYS SCULLEY IS BETTER QUALIFIED TO TAKE ON THIS CHALLENGE THAN HE IS. HOWEVER, MARKKULA SAYS HE ISN'T INTERESTED IN WORKING AT ANY OTHER COMPANY. HE PLANS TO DO LONG-RANGE RESEARCH AND PLANNING FOR APPLE.

SCULLEY SAYS HE PLANS TO TAKE A HARD LOOK AT APPLE'S DEALERSHIP NETWORK, WHICH, LIKE MANY IN THE COMPUTER BUSINESS, HAS BEEN PLAGUED BY DISCOUNTING, LARGELY BECAUSE DEALERS SELL EXCESS SUPPLIES TO DISCOUNTERS. HE SAYS HIS EXPERIENCE IN MOTIVATING FRANCHISED PEPSI BOTTLERS TO SELL PEPSI-COLA WILL HELP HIM BUILD DEALER LOYALTY AT APPLE.

HE HASN'T YET DISCUSSED OTHER IDEAS FOR MERCHANDISING APPLE'S COMPUTERS WITH JOBS, BUT HE FIGURES THE JOB WILL BE EASIER BECAUSE OF THE RECOGNIZABILITY OF THE APPLE NAME. AFTER SIX YEARS, IT IS BY FAR THE MOST FAMILIAR-PERSONAL COMPUTER BRAND TO HOUSEHOLD CONSUMERS.