Apple’s profit slump means a pay cut for Tim Cook

Apple's earnings dropped 14 percent in 2016, which means a 15 percent pay cut for CEO Tim Cook

Apple CEO Tim Cook's total compensation took a dive for 2016, as the company missed its financial targets for the year.

The company's earnings for the year to Sept. 24 dropped 14 percent compared to a year earlier.

As a result, Cook's total compensation dropped 15 percent -- despite a 50 percent rise in base salary.

He certainly won't have to start eating ramen noodles -- he made US$8,747,719, after all -- but he and fellow senior executives lost out on a few million each because of the poor performance.

Cook's compensation consists of a base salary and an annual cash incentive that can reach be worth four times base salary if the company's revenue and earnings exceed the maximum goals set, as they did in 2015 when Cook received $10.28 million, including $280,000 in "other" compensation.

In 2016, in contrast, the incentive was only 1.79 times base salary, according to documents Apple filed with the SEC on Friday. Luckily for Cook, that $1 million pay rise at the start of the year also receives the multiplier: Without that, he would have made less than $5 million in total.

Apple also provided compensation details for five other executives in its filing: They all made more than Cook.

The five were CFO Luca Maestri, senior vice president for retail Angela Ahrendts, SVP for internet software and services Eddy Cue, SVP for hardware engineering Dan Riccio, and general counsel Bruce Sewell. Each had a base salary of $1 million, the same as last year, an annual incentive of $1.79 million, and stock awards of $20 million.

That puts total compensation for each of the five senior executives at around $22.8 million, down from $25 million the previous year.

Cook didn't receive any additional stock awards in 2016 -- but he's still profiting from the award he received in 2011, when he became CEO. In August 2016 the first 1.26 million of those stock units vested, worth $136 million. And there's more to come: Another 2.1 million units that have not yet vested will net Cook a further $237 million (at their current price) when they do.

Of course, those compensation numbers are all provisional: They still require shareholder approval, something the board is recommending. It is also proposing that shareholders continue to approve executive pay every year, rather than every two or three years, as they might also choose to do.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Apple

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?