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Apple executives see pay drop in 2016 as CEO reaps $145 million
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Apple CEO Tim Cook announces the new iPhone 7 during an event to announce new products Wednesday, Sept. 7, 2016, in San Francisco. (AP/Marcio Jose Sanchez)
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pple Inc.’s top executives saw their compensation fall last year while Chief Executive Officer Tim Cook had his biggest payday yet.
Cook’s five top lieutenants received about US$22.8 million each for 2016, according to a proxy statement filed Friday. The pay packages included $2.8 million in salary and cash bonus, and $20 million in equity awards.
Cook’s $8.75 million disclosed compensation, including a $3 million salary and $5.37 million cash bonus, doesn’t account for 1.26 million shares delivered from the big award he received after becoming Apple’s CEO. They were worth about $136 million when they vested -- the biggest distribution Cook has received in a single year. The value of the shares isn’t included in the proxy filing’s summary compensation table since it lists new awards.
The windfall is a huge jump from 2015 when the CEO received $10 million in salary and bonus, and $64.2 million in stock that vested. 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 the saturation point.
The board granted Cook 1 million 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 Aug. 24 was in the top third among businesses in the index. He also received 980,000 shares tied to him remaining on the job. Combined with previous payouts, Cook has collected stock worth more than $350 million since he became CEO.
He’s also on track to get half of the shares tied to relative stock return and scheduled to pay out in August 2017 and 2018 based on three-year shareholder returns, according to data compiled by Bloomberg. 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 four-and-a-half years after they’re granted.
Absent from Apple’s compensation disclosures is Chief Design Officer Jony Ive, called by some the company’s most important employee. Ive designed many of Apple’s most iconic products including the iMac, iPod and iPhone.
Apple representatives didn’t immediately respond to a call and an e-mail sent outside business hours.
