Cook gets payment windfall from Apple
APPLE’s top executives saw their compensation fall last year, while chief executive Tim Cook had his biggest payout yet from his record 2011 award.
Cook’s five top lieutenants received about $22.8 million (R314m) each for last year, according to a proxy statement filed on Friday.
The pay packages included $2.8m in salary and cash bonus and $20m in equity awards.
Cook’s $8.75m disclosed compensation for fiscal 2016, including a $3m salary and $5.3m cash bonus doesn’t account for 1.26 million shares delivered from the big award he received after becoming Apple’s chief executive. They were worth about $136m when they vested – the biggest distribution Cook has received in a single year from the award.
The value of the shares isn’t included in the proxy filing’s summary compensation table since it only lists new equity grants.
The windfall is a huge jump from 2015 when the chief executive received $10m in salary and bonus, and $64.2m in stock from his 2011 promotion award. The bulk of the shares for fiscal 2016 weren’t tied to performance and therefore not at risk of forfeiture even as Apple reported its first annual sales decline since 2001.
Recent versions of the iPhone, Apple’s biggest revenue generator, haven’t inspired automatic upgrades the way earlier models did. Competitors in China are churning out cheaper devices while developed countries are reaching saturation point.
The board granted Cook 1m restricted shares set to vest in two increments over a decade when he took over the Cupertino, California-based company in 2011. In 2013, the compensation committee tied one-third of the shares to the company’s relative stock performance versus the S&P 500 at Cook’s own request and scheduled the shares to pay out annually.
A year later, the company made a 7-for-1 stock split.
Cook got all 280 000 performance-linked shares earmarked for 2016 since Apple’s stock return over the three years ended August 24 was in the top third among businesses in the index. He also received 980000 shares tied to him remaining on the job. Combined with previous payouts, Cook has collected stock worth more than $350m since he became chief executive. He’s also on track to get half of the shares tied to relative stock return and scheduled to pay out in August this year and next year.
The iPhone-maker’s 2016 calendar year stock return including dividends topped 12 percent, beating almost half of S&P 500 businesses.
Equity awards for senior vice-presidents Angela Ahrendts, Eddy Cue, Luca Maestri, Dan Riccio and Bruce Sewell are also partially tied to Apple’s relative stock return over three years. The remainder typically vests within fourand-a-half years after they’re granted. The cash bonuses paid out below target as the company missed net sales and operating income goals.
Absent from Apple’s compensation disclosures is chief design officer Jony Ive.
The latter designed Apple’s iconic products such as the iMac, iPod and iPhone.
Combined with previous payouts, Cook has collected stock worth more than $350m