Welcome to the MacNN Forums.

If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.

You are here: MacNN Forums > News > Mac News > Report: Tim Cook docked himself as much as he earned in 2013

Report: Tim Cook docked himself as much as he earned in 2013
Thread Tools
MacNN Staff
Join Date: Jul 2012
Status: Offline
Reply With Quote
Dec 31, 2013, 01:57 AM
 
A move made by Apple CEO Tim Cook and the board of directors at Apple has ended up costing Cook some $4 million in additional bonuses over the previous arrangement, according to proxy statements filed by the company over the weekend. Cook annually receives a stock grant, but because AAPL didn't outperform the overall S&P500 average to which the award is tied, Cook lost about half of the grant, which would currently be worth about $4 million.

Cook is hardly hurting for money: in addition to a $1.4 million salary and double that amount in performance bonuses, he also received stock grants which, if they vested today, would be worth $36 million for a total theoretical 2013 compensation package of $40 million (though only 10 percent of that is actual cash). Reportedly, it was Cook himself that urged the board to put more of his stock award at risk, saying it was out of a "strong desire to set a leadership example in the area of CEO compensation and governance," that he wanted his stock award to be more closely tied to how the company performed on the stock market.

Despite the odd performance of AAPL across 2013, Apple itself had a banner year -- with higher sales of its flagship products, increasing US share against competitors and record revenues. However, concerns about the company's ability to compete in China and other developing markets, a much-delayed deal with China Mobile, a lower percentage of profit growth and a fair amount of what could simply be called market manipulation all combined to see a 26 percent drop in stock value between August of last year and 2013, compared to an average S&P gain of 18 percent. Had those figures been reversed, Cook would not have been awarded more stock -- he could only lose a portion of the existing stock grant if AAPL didn't outperform the S&P, reports CNN Money.

Thus, the entire portion of his vested stock grant that was at risk was wiped out -- around $4 million worth. Ironically, the stock has rebounded and outperformed the S&P500 since August, and is now slightly up for 2013 overall (about 4.2 percent, and up 21 percent since August). Cook has not appeared to be concerned about the loss, and despite earning more than billionaire Steve Jobs' famous $1 Apple salary, Cook has been in a position of refusing extra money from Apple on occasion, such as when the board decided that owners of Restricted Stock Units (RSUs) should receive the same dividend as other investors. At the time, Cook himself was eligible for a dividend award that would have been worth $75 million over 10 years, but he refused it.
     
Fresh-Faced Recruit
Join Date: Aug 2009
Status: Offline
Reply With Quote
Dec 31, 2013, 09:15 AM
 
How will he survive, when he's lost half of his pay for the year?
     
Fresh-Faced Recruit
Join Date: Apr 2005
Status: Offline
Reply With Quote
Dec 31, 2013, 10:06 AM
 
It's not a good sign when the CEO has his bonus tied to the stock price. Tied to profits, definitely, or to unit sales, but never stock price. The motivation to drive up the stock price seldom if ever results in better products for the consumer.
     
Addicted to MacNN
Join Date: May 2001
Location: Atlanta, GA
Status: Offline
Reply With Quote
Dec 31, 2013, 12:55 PM
 
I agree with @Wingsy.

Stock price simply reflects short term thinking and it's very hard to do long term investments when your metric is based on the short term results. (That's the big problem with public company stocks in general.)

Apple has always been a long term company. I don't know if this is a recent change or not. But without more information, this just seems bad.

I hope I'm wrong.

On the upside Mr. Cook is leading by example, and I admire that.
- MacBook Pro 15" Core i7 2.3Ghz / 256SSD (Work laptop)
- iMac 3.2Ghz 1TB
     
Fresh-Faced Recruit
Join Date: May 2000
Location: San Francisco, CA USA
Status: Offline
Reply With Quote
Jan 2, 2014, 01:51 PM
 
Guilt.
     
   
Thread Tools
Forum Links
Forum Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On
Top
Privacy Policy
All times are GMT -4. The time now is 02:39 AM.
All contents of these forums © 1995-2014 MacNN. All rights reserved.
Branding + Design: www.gesamtbild.com
vBulletin v.3.8.8 © 2000-2014, Jelsoft Enterprises Ltd., Content Relevant URLs by vBSEO 3.3.2