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Tim Cook's Pay Was $1.5 Million Less in 2016 as Apple Missed its Own Performance Targets

Apple's annual shareholders meeting will be held on February 28 at 9:00 a.m. Pacific Time in the Town Hall building at its Infinite Loop headquarters in Cupertino, California, according to an SEC document filed electronically today. Admission is open to all shareholders of record on a first come, first served basis.

tim_cook_hands_raised
A primary item of business on the agenda is to elect the Board of Directors to serve until the next annual meeting of shareholders in 2018, with Apple nominating the same eight individuals currently serving on its board: Tim Cook, Al Gore, Bob Iger, James Bell, Andrea Jung, Art Levinson, Ron Sugar, and Sue Wagner.

The filing reveals Apple CEO Tim Cook made $8.7 million in 2016, down from $10.28 million in 2015 and $9.2 million in 2014. Cook's earnings included a base salary of $3 million, non-equity incentives of $5.37 million, and other compensation of nearly $378,000. Other named executives netted nearly $23 million apiece.

Apple Executive Compensation in 2016

• Apple CEO Tim Cook: $8,747,719
• Apple CFO Luca Maestri: $22,803,569
• Apple retail chief Angela Ahrendts: $22,902,892
• Apple services chief Eddy Cue: $22,807,544
• Apple hardware engineering chief Dan Riccio: $22,807,544
• Apple general counsel Bruce Sewell: $22,807,544

The filing did not disclose compensation for other key Apple executives such as design chief Jony Ive, operating chief Jeff Williams, software engineering chief Craig Federighi, and marketing chief Phil Schiller.

Apple noted it did not meet its target performance goals for both net sales and operating income in 2016, resulting in the senior executives receiving only 89.5% of their cash incentives. In 2015, the executives received 100% of their cash incentives as Apple met its performance goals for sales in that year.

Update: While Cook earned roughly $1.5 million less from his base salary and non-equity incentives in 2016, it was also the year in which he reached five years as CEO and unlocked nearly $137 million in previously-awarded stock bonuses tied to both his tenure and Apple's performance under his leadership. Accordingly, Cook earned roughly $145 million last year, his biggest payout yet as head of the company.

Tags: SEC, Tim Cook

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Top Rated Comments

otternonsense Avatar
128 months ago
I've grown weary of this smug, pontificating buffoon. I hope this salary is the last he'll get, and Apple will promptly change management.
Score: 106 Votes (Like | Disagree)
whsbuss Avatar
128 months ago
Time for change..... clean house Apple board. Get back to innovation
Score: 47 Votes (Like | Disagree)
LordQ Avatar
128 months ago
He might not be the best CEO for Apple and he's definitelynot Steve, but his strong stance on protecting our privacy is what I like about him.
Score: 44 Votes (Like | Disagree)
Lesser Evets Avatar
128 months ago
What does he actually do? He doesn't spur product updates unless it is a phone.
Score: 40 Votes (Like | Disagree)
128 months ago
They've been incredibly profitable under his leadership, why would they fire a successful CEO who has increased profits, marketshare?

I may not be a fan of him, but using the metrics that business people use to measure success/failure. He's been an unabashed success.
He essentially has solved the "big company" problem for Apple, which in a nutshell is that large companies can't achieve the same growth as smaller companies, all else being equal. Thus, and especially in the tech sector, companies that grow very quickly as Apple did often plummet after that. So Cook should get credit for restructuring Apple and its finances to sustain the business legacy that Jobs left. He also brings tremendous supply-chain expertise (a huge thing for Apple, which routinely must acquire components in insanely high numbers, from all corners of the world, in near secrecy and extremely quickly) and has pushed into emerging and difficult markets very successfully. And it's not insignificant that Apple under his leadership has championed data secrecy and human rights in ways that have made a difference. All of this supports your point that Cook has been successful in many ways related to Apple's business.

But is that enough? I would argue that for Apple, it is not. First and most importantly, Apple's legacy is one of innovation, technically and culturally. Although Cook's Apple has innovated to a certain extent with the Apple Watch and the AirPods, none of this is "disruptive" in the way that Jobs achieved multiple times. Worse, Apple is squandering obvious advantages nearly everywhere one looks. Given how many people viewed the MacBook Air as a near-perfect consumer laptop, it's rather astonishing how Apple failed to realize many of that product's strengths when it created the MacBook. The same is true of the MacBook Pro line: the new computers are quite nice in many ways but they simply failed to deliver what the target audience wanted and expected to see. Software like Aperture (Apple's best software product ever, in my opinion), which could have served as a foundation for making Apple a truly dominant imaging/photography platform (including for consumers), was clumsily abandoned. Long-awaited products like the Apple TV were released with glaring issues, many of which ignored real-world concerns and some remain to this day. I of course could go on.

In addition, Apple's product lines are becoming increasingly confused and confusing -- one of the issues that nearly destroyed Apple just before Jobs returned. Who are the computers in Apple's laptop line targeted toward? It's increasingly unclear. What standards is Apple pushing? Lightning, one might have thought after the iPhone 7, only to see the laptops include a headphone jack and appear to advance other ports. Also, contrary to much popular mythology, Jobs was a proponent of industry-standard technology (particularly ports) where Apple's "invented here" offerings didn't offer a clear advantage. It was Jobs' Apple, after all, that championed USB as the replacement for several legacy ports when Apple released the original iMac. Cook could have done the same thing by using USB-C instead of Lightning on the iPhone, and this would have eased much of the headphone jack concern (because any new headphones people had to buy would at least rely on what Apple was advancing as an industry standard, available to all). Jobs also priced Apple's products fairly -- there were many instances in which the market was favorably impressed by a product priced lower than expected (the original iPad was the best example of this) and even where an "Apple Tax" existed, users understood why they were paying more. Not so now. And those things that Jobs didn't do well -- the cloud, for example -- have fared no better under Cook.

In my view, Cook probably was the right person for the job when he was hired. Apple needed someone who knew how to balance stability with structural change while positioning Apple for a sustained "big company" future. Cook did that. Now, what Apple needs is quite different: it needs a restoration of its "startup" ethos and it needs excitement. And it needs these things quickly: a widespread defection from a significant part of the "ecosystem" is now possible and would be extremely damaging. I believe Apple should celebrate what Cook has accomplished and respectfully show him the door.
Score: 31 Votes (Like | Disagree)
128 months ago
"Apple noted it did not meet its target performance goals for both net sales and operating income in 2016,"

Jobs from 1995:

"They didn't have a clue about how to do it and they didn't take any time to find out because that's not what they cared about. They cared about making a lot of money. So they had this wonderful thing that a lot of brilliant people made called the Macintosh and they got very greedy. And instead of following the original trajectory of the original vision -- which was to make this thing an appliance, to get this out there to as many people as possible -- they went for profits and they made outlandish profits for about four years. Apple was one of the most profitable companies in America for about four years.

What that cost them was the future. What they should have been doing was making reasonable profits and going for market share, which was what we always tried to do.

Macintosh would have had a 33% market share right now, maybe even higher, maybe it would have even been Microsoft, but we'll never know. Now it's got a single-digit market share and falling. There's no way to ever get that moment in time back. The Macintosh will die in another few years and it's really sad."
39:30
Score: 26 Votes (Like | Disagree)
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