Apple Computer Inc is firmly denying a report in the San Jose Mercury News which suggested that chairman John Sculley is likely to leave the company after he completes a summer sabbatical in August. The report News quoted two unnamed sources with high-level connections to the company as saying Sculley was unlikely to return to the company after he completes the sabbatical. John Sculley has absolutely no plans to leave Apple, Apple spokesman Christopher Escher told Reuter, and the news wire could not reach Sculley for comment. The company said Sculley was going on a six-week sabbatical starting some time in July and would spend most of the time at his house in Maine. The sabbatical had been planned for some time. But the core of the Mercury News report was the suggestion that the switch that saw Sculley replaced as chief executive by Michael Spindler was not initiated by Sculley himself, but by a board unhappy with the performance of the Apple share price – down 40% since January. Sculley was surprised, said one of the sources, a highly placed Apple executive. The board was disappointed with Sculley because he took his eye off the ball, the Mercury claims, by failing to get enough computers manufactured to meet strong demand and by spending too much time on futuristic projects and courting the Clinton White House. The Mercury also quotes the Apple denial, and notes that in interviews after his resignation from the chief executive’s job, Sculley denied any intention to leave Apple.
Manhattan Office
But insiders told the paper that Sculley would open a Manhattan office during his sabbatical and then consider his options. Neither source was certain if the board – which includes not only Sculley but also new chief Michael Spindler – has reached a final decision on Sculley’s departure. But they said most top-level Apple executives expect the board will ask Sculley to sever his formal ties with the company. One of the sources said the board decided against removing Sculley entirely two weeks ago for fear of bad publicity, and instead decided to credit him publicly with putting the issue on the table himself for a reluctant board to accept. The board went along with that line because they didn’t want the shock value, the paper quotes one of the sources as saying, describing the person as an outsider with close ties to top Apple officials. They were very concerned about how this got portrayed. Board members, many of them large shareholders, had apparently been deeply concerned about Sculley’s tenure for many months and were propelled into action on June 7 after several analysts downgraded their ratings of Apple shares, prompting Apple to acknowledge two days later it would not meet profit expectations for the rest of the year. The board was essentially frustrated at the price of the stock, the paper quotes John Rossi, an analyst with Robertson Stephens & Co in San Francisco as saying: in the last meeting, the level of whining was extraordinarily high. Sculley’s continued trips to Washington, while polishing his political star, apparently sealed his fate with the board. The paper also suggests that Apple’s government affairs vice-president David Barram will likely leave Apple soon, possibly to take a position with the Clinton administration, perhaps number two at Commerce, a post allegedly offered to and turned down by Sculley. If Sculley were to go in the circumstances described, it would mirror his own ousting of co-founder Steve Jobs from the top job.
