CEO Tim Cook's compensation cut by $1.5M following Apple's 2016 decline in sales

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in General Discussion
Apple on Friday revealed that its executive team, including Chief Executive Tim Cook, received a pay cut for their performance in 2016, reflecting the company's first decline in revenue in 15 years.




The docked pay comes as a result of Apple's performance-based cash incentive opportunities for its top brass. With net sales of $215.6 billion and operating income of $60 billion, Apple came in slightly short of its respective target goals set by the company's compensation committee.

"This performance resulted in a combined payout at 89.5 percent of target for each named executive officer," Apple revealed in a U.S. Securities and Exchange Commission filing.

For Cook and his team, things could have been worse: Apple's compensation committee has the ability to adjust payouts downward based on performance and individual contributions. However, the committee determined that no such further cuts would be made.

The company noted that the 2016 payments to its executive team were "significantly less" than they received in 2015, as a result of "strong pay-for-performance alignment" in their contracts.




In all, net sales were down 7.7 percent in 2016, and operating income dropped 15.7 percent.

Cook's base salary was increased to $3 million at the beginning of 2016, up from $2 million a year prior. But his total compensation reached $8.7 million, an overall reduction of over $1.5 million from a year prior.

In fact, Cook earned less in 2016 than he did two years prior, in 2014.

The base salary for Apple's other named executive officers remained steady at $1 million for 2016, though the overall compensation to them was also reduced. Other named executives at Apple include Luca Maestri, Angela Ahrendts, Eddy Cue, Dan Riccio, and Bruce Sewell.
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Comments

  • Reply 1 of 191
    bulk001bulk001 Posts: 371member
    While CEO's need to help their companies perform, it should be for the long run. This type of thinking makes them focus on next year's earning instead of the next 10 year's products. 
    fracjas99SpamSandwichirelandjahbladeStrangeDaysSolipscooter63patchythepirateraulcristian
  • Reply 2 of 191
    Maybe this year they will focuse more on innovation, and making better products, and stay out of politics.  
    MplsPelijahgdesignrSpamSandwichStrangeDayspulseimagestallest skilwaltgentropysmobird
  • Reply 3 of 191
    irelandireland Posts: 16,145member
    I wish the stock market somehow didn't exist. None of this crap matters.
    bloggerblogjas99Solicali
  • Reply 4 of 191
    quadra 610quadra 610 Posts: 6,652member
    What's interesting is that if these strictures were applied to the rest of the industry, executive offices would look like a barren wasteland industry-wide. Especially at Microsoft. 

    Apple execs get a pay cut for a slight decline in performance, yet Nadella still has a job at Microstupid.  
    jas99SpamSandwichjahbladeStrangeDayscalibadmonkpalominesreeadmiral.ashik
  • Reply 5 of 191
    Maybe this year they will focuse more on innovation, and making better products, and stay out of politics.  
    Apple has always been in politics.
    jas99jahbladeStrangeDaysdewmermfpdxequality72521lamboaudi4admiral.ashik
  • Reply 6 of 191
    macxpressmacxpress Posts: 2,373member
    ireland said:
    I wish the stock market somehow didn't exist. None of this crap matters.
    And/Or, I wish Apple were a private company. I know it sounds stupid and impossible but then Apple could just focus on being Apple and not putting cash in someone's pockets 24/7/365. 
    jas99pulseimagescaliequality72521raulcristianavon b7
  • Reply 7 of 191
    Rayz2016Rayz2016 Posts: 1,267member
    What's interesting is that if these strictures were applied to the rest of the industry, executive offices would look like a barren wasteland industry-wide. Especially at Microsoft. 

    Apple execs get a pay cut for a slight decline in performance, yet Nadella still has a job at Microstupid.  
    And that is exactly how it should be.  I like that Apple punishes its executives when they fail to hit their targets, and does so in public. 

    The company made a number of uncharacteristic missteps in 2016, the biggest of which was allowing bloggers and whiners to take control of the narrative. 

    They were far too passive. I might go as far as to say, resting on their laurels. 

    edited January 6 andrewj5790rmfpdxcalipatchythepirateadmiral.ashik
  • Reply 8 of 191
    saareksaarek Posts: 978member
    I don't understand how they let the Mac lineup get in the state it's in.

    With their money they could easily have upgraded the line up with new internals whilst they finished off any innovations that they wanted to roll out.

    Piss poor management, very unusual.
    king editor the gratermfpdxpulseimagesentropysavon b7
  • Reply 9 of 191
    Rayz2016Rayz2016 Posts: 1,267member
    saarek said:
    I don't understand how they let the Mac lineup get in the state it's in.

    With their money they could easily have upgraded the line up with new internals whilst they finished off any innovations that they wanted to roll out.

    Piss poor management, very unusual.

    Apple doesn't like to use money from one division to prop up another one, especially if it's one as well established as the Mac division. Microsoft did that with Windows mobile, which is probably why it took them so long to realise it was failing. 



    watto_cobra
  • Reply 10 of 191
    mazda 3smazda 3s Posts: 1,476member
    What's interesting is that if these strictures were applied to the rest of the industry, executive offices would look like a barren wasteland industry-wide. Especially at Microsoft. 

    Apple execs get a pay cut for a slight decline in performance, yet Nadella still has a job at Microstupid.  
    Maybe I'm mistaken, but hasn't Microsoft actually done pretty well financially since Nadella took over? Stock is up about 90 percent since he took over in February 2014.
    yojimbo007entropyssingularityanantksundaramavon b7
  • Reply 11 of 191
    Rayz2016Rayz2016 Posts: 1,267member
    Actually, the biggest foulup was missing Christmas for the AirPod launch. 
    edited January 6 slprescottpatchythepirate
  • Reply 12 of 191
    ben20ben20 Posts: 44member
    I have a hard time understanding why they don't update the MacPro or the Mac
    Miniquadra 610 said:

    What's interesting is that if these strictures were applied to the rest of the industry, executive offices would look like a barren wasteland industry-wide. Especially at Microsoft. 

    Apple execs get a pay cut for a slight decline in performance, yet Nadella still has a job at Microstupid.  
    Nadella is responsible for Microsoft stocks all time high. I think Apple really has problem with not updating the Mac's.
    edited January 6 entropyssingularitylamboaudi4
  • Reply 13 of 191
    Maybe, we must remember that his salary was ‘fixed’ when he became CEO of Apple and he by himself asked to be ‘tied to results.’ Also, when the paying to shareholder began, he excuse its shares of being rewarded. Conscoosness to shareholders is a rare virtue.
    calipalomine
  • Reply 14 of 191
    jas99jas99 Posts: 21member
    Rayz2016 said:

    "... allowing bloggers and whiners to take control of the narrative. "

    ^^^^THIS.  So much disinformation ALL THE TIME. Is there no PR at Apple????
    Solicalipalominepatchythepirateanantksundaramadmiral.ashik
  • Reply 15 of 191
    MacProMacPro Posts: 15,864member
    lmasanti said:
    Maybe, we must remember that his salary was ‘fixed’ when he became CEO of Apple and he by himself asked to be ‘tied to results.’ Also, when the paying to shareholder began, he excuse its shares of being rewarded. Conscoosness to shareholders is a rare virtue.
    It's pretty rare anywhere!  ;)  (I had to switch auto correct off as I it seemed to turn anything I wrote into Latin! lol)
  • Reply 16 of 191
    Rayz2016Rayz2016 Posts: 1,267member
    lmasanti said:
    Maybe, we must remember that his salary was ‘fixed’ when he became CEO of Apple and he by himself asked to be ‘tied to results.’ Also, when the paying to shareholder began, he excuse its shares of being rewarded. Conscoosness to shareholders is a rare virtue.
    That is very true. He volunteered to surrender a $75million bonus a few years ago. 
    Solicalipalominewatto_cobraadmiral.ashik
  • Reply 17 of 191
    MplsPMplsP Posts: 34member
    bulk001 said:
    While CEO's need to help their companies perform, it should be for the long run. This type of thinking makes them focus on next year's earning instead of the next 10 year's products. 
    True, but unfortunately that's how most of the business world works. People focus on quarterly profits far more than anything long term. Blame the shareholders and board as much as the CEO, since he's got to answer to them

    still, I agree with the statement above. Hopefully this will be a kick in the pants for them
  • Reply 18 of 191
    They are not focused on Innovation, the iwatch was a failure. Instead of focusing on VR and being a leader in that they are taking a back seat. Instead of making their laptop and computer screens touchscreen, they make more expensive iPads. Instead of being a leader in home automation they took a back seat to google and amazon. They havent updated their mac pro line in several years now. Their computers receive marginal upgrades and the prices go up. If I was an investor, I would have dumped this a year ago, even with it trading near all time highs now. So many other great investments out there, even AMZN and NVDA have outperformed AAPL. Apple has absolutely built a great infrastructure around movies and music but its going to be cannibalized by Amazon Prime and other streaming services. Tim Cook has proven he isnt a Steve Jobs.
  • Reply 19 of 191
    thedbathedba Posts: 338member
    The headline and article itself clearly state that this cut was based on sales performance. 
    Nothing to do with stock prices or tech media BS. I really can't see where many of you read this.
    anantksundaram
  • Reply 20 of 191
    gatorguygatorguy Posts: 15,544member
    bulk001 said:
    While CEO's need to help their companies perform, it should be for the long run. This type of thinking makes them focus on next year's earning instead of the next 10 year's products. 
    It shouldn't. Not a single one of them needs the money, nor could ever in their entire lifetimes spend the money they have already been paid in past years.

     IMHO Apple's executive team should be doing the jobs because of the challenge, personal pride, or maybe even the love of the company and not more personal monetary compensation. And those things may be their motivation, but at this point in their executive careers they don't benefit from any more money. If a drop in bonus pay that they wouldn't ever need anyway is enough to make a couple of them lose focus on the long-term picture perhaps they aren't the best leads for Apple anyway. Just my.02
    retrogustosingularityaussiepaulhmm
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