Tim Cook’s CEO salary for the calendar year 2012 was $4.17 million, which includes a $1.36 million salary and $2.8 million in compensation related to incentive plans, reveals a document Apple filed with the U.S. Securities and Exchange Commission. Now, a bunch of media outlets pointed out that Cook’s salary dropped 99 percent versus 2011. Such sensationalist reporting couldn’t be farther from the truth.
Cook’s $376 million compensation in 2011 and $52 million in the year before was given to him in stock options and these won’t vest until 2016 and 2021.
So yeah, Cook’s ‘salary’ did drop 99 percent this year versus 2011, but without stock awards (his base salary last year was $900,000). The filing also reveals the company gave a pay raise to a select few members of its executive team to reflect their increased responsibilities following the departure of SVP of iOS software Scott Forstall, announced in October…
Base 2012 salary for all senior Apple executives has been raised from $800,000 to $875,000 following the management shake-up.
Apple’s long-standing finance boss Peter Oppenheimer’s 2012 compensation is valued at $68.6 million, up from $1.42 million a year earlier, with his 2012 stock awards valued at $66.2 million, reports Bloomberg.
His total compensation in 2011 put him ahead of the highest-paid CEOs at the time, according to Equilar Inc., which tracks executive compensation. Oracle Corp. CEO Larry Ellison received 2011 compensation valued at $77.6 million. At Microsoft Corp., Steve Ballmer’s pay package was worth $1.38 million.
Fortune’s Philip Elmer-DeWitt slams Bloomberg, saying “you’d think this would be pretty easy to sort out, especially for the financial brainiacs at Bloomberg News”.
He explains:
The fact is — despite countless stories that described Cook has the highest-paid CEO of 2011 — Cook didn’t have those 1 million shares last year when they were worth $376 million, nor did he have them in 2012, when they were worth, as of Wednesday’s close, $513 million.
Moreover, although other Apple employees with unvested RSUs collected dividends on their shares this year, Cook asked that his RSUs not be included in the dividend program, passing up on a chance to take home another $75 million.
So, all Cook received n 2012 was a raise that brought his base salary to $1.4 million.
“Despite this increase”, the proxy statement notes, “the target annual cash compensation for Mr. Cook remains significantly below the median annual cash compensation level for CEOs at peer companies”.
And who’s Silicon Valley’s lowest-paid CEO?
That would be Amazon’s boss Jeff Bezos, whose 2011 pay package was just $81,840 – and he didn’t get any stock awards.
Senior Apple execs Bob Mansfield, Bruce Sewell, Jeff Williams and Peter Oppenheimer all received 150,000 restricted shares in 2012.
Tim Cook salary articles last yr saying he earned $378 million were dumb. They’re dumber this yr for saying comp dropped 99%.
— Eric Slivka (@WildCowboy) December 27, 2012
Another tidbit to glean from the filing:
The Company exceeded the maximum performance goals for both net sales and operating income set by the Compensation Committee for 2012. Accordingly, each executive officer received the maximum payout of 200% of base salary under the performance-based bonus plan.
Apple’s top dogs were well compensated for the services rendered this year.
Apple is also recommending that shareholders vote against a dedicated Human Rights Committee because it says the stringent policies it put in place amid reports of poor working conditions at Foxconn plants are addressing the issue.
The Company’s dedicated Supplier Responsibility team continually audits the Company’s suppliers for compliance with the Company’s industry-leading Supplier Code of Conduct. The Supplier Code of Conduct is based on widely recognized international human rights principles as defined by the United Nations and the International Labor Organization.
Not only would an additional committee be redundant, it would also “distract the Board from its other responsibilities to the Company and its shareholders, while adding little value to the Company’s existing commitment to human rights and social responsibility”, the filing reads.
The document also provides a quick backgrounder on Cook.
Timothy Cook has been the Company’s Chief Executive Officer (the “CEO”) since August 2011 and was previously the Company’s Chief Operating Officer since October 2005. Mr. Cook joined the Company in March 1998 and served as Executive Vice President, Worldwide Sales and Operations from 2002 to 2005. In 2004, his responsibilities were expanded to include the Company’s Macintosh hardware engineering.
From 2000 to 2002, Mr. Cook served as Senior Vice President, Worldwide Operations, Sales, Service and Support. From 1998 to 2000, Mr. Cook served as Senior Vice President, Worldwide Operations.
Mr. Cook has served as a director of NIKE, Inc. since November 2005. Mr. Cook brings to the Board extensive executive leadership experience in the technology industry, including the management of worldwide operations, sales, service and support.
Though shares of Apple dropped 27 percent from a September record, AAPL is still in a notably better position than most other tech stocks.
As for Cook, Apple gave him a million restricted stock units in 2010 for taking the CEO job. And to make sure he sticks around for at least a decade, half a million shares are set to vest on August 24, 2016 and another 50 percent on August 24, 2021.
By the way, the combined $428 million in Cook’s 2010 and 2011 stock options pay package is now worth nearly $750 million at Apple’s current market value.
Talk about low ‘salary’.