The source of their dissatisfaction?
A 14 percent pay rise for the executive team because compensation consultant F.W. Cook & Co. determined that salaries were well below the peer median despite the fact that the 2012 proxy claimed they were approximately at the median?
That might have had something to do with it.
Or the 50 percent increase in base salary for CEO Cook on his appointment as CEO? At the same time as being awarded one million restricted stock units that were worth $376,180,000 at the time of grant and are now worth $445,210,000 despite the fall in stock price over the last few months? A grant that has no other requirements for Mr. Cook other than being there for the next five and 10 years?
That might have had something to do with it.
Or maybe it was the fact that the top five executives all got a cash bonus last year because the company exceeded its net sales and operating income targets in a year when the stock price fell from its high of around $700 to $550 and has continued to decline?
That might have had something to do with it.
So, what about those bonuses? They’re not big, by Apple standards or any other standards, but how come they got paid out in this falling share value environment? This is what the proxy statement has to say about it:
The performance criteria used to determine the annual bonuses for the named executive officers were net sales and operating income as determined in accordance with generally accepted accounting principles. These criteria were chosen because they reflect commonly recognized measures of overall company performance and are associated with the creation of value for shareholders.
“These measures were chosen because they reflect commonly recognized measures of overall company performance and are associated with the creation of value for shareholders”?
Commonly recognized? Are associated with? For a company that makes very sophisticated products that is about the most unsophisticated reason for choosing a performance metric that I think I’ve ever read.
How about choosing a performance metric that ACTUALLY reflects company performance? Take the time to figure it out.
How about choosing a performance metric that isn’t just associated with the creation of value for shareholders but actually measures the creation of value for shareholders.
I don’t know what irritated Apple’s shareholders enough to get them to vote against the pay plans, but that would do it for me right there.
