Apple's Tim Cook is the most pay-efficient CEO in America, Bloomberg says
The unprecedented financial success Apple has seen since Tim Cook took over as chief executive makes him the best corporate leader in America when it comes to pay versus performance, according to a new Bloomberg executive ranking.
Cook's $65.2 million in 2014 compensation amounts to just 0.2 percent of Apple's $28.6 billion "economic profit" since 2012, Bloomberg notes. No other chief executive boasts a ratio equal to or lower than Cook's.
Microsoft CEO Satya Nadella came second at 0.4 percent, while Exxon Mobil's Rex Tillerson booked a third-place finish with 0.7 percent.
"Apple is just unbelievably killing it," Hudson Square Research analyst Dan Ernst told the publication. "A good leader like Cook builds a team around him that can do the job."
Most of Cook's top lieutenants are longtime Apple veterans, but he has reached outside the family for some key hires. He brought in Lisa Jackson from the Environmental Protection Agency to oversee environmental initiatives, and lured then-Burberry CEO Angela Ahrendts to come aboard as senior vice president in charge of retail.
The rankings track the top 100 highest-paid public company executives, regardless of title. Order is determined using the executives' pay as a percentage of their company's after-tax net profit, minus cost of capital, which Bloomberg refers to as economic profit.
Cook's $65.2 million in 2014 compensation amounts to just 0.2 percent of Apple's $28.6 billion "economic profit" since 2012, Bloomberg notes. No other chief executive boasts a ratio equal to or lower than Cook's.
Microsoft CEO Satya Nadella came second at 0.4 percent, while Exxon Mobil's Rex Tillerson booked a third-place finish with 0.7 percent.
"Apple is just unbelievably killing it," Hudson Square Research analyst Dan Ernst told the publication. "A good leader like Cook builds a team around him that can do the job."
Most of Cook's top lieutenants are longtime Apple veterans, but he has reached outside the family for some key hires. He brought in Lisa Jackson from the Environmental Protection Agency to oversee environmental initiatives, and lured then-Burberry CEO Angela Ahrendts to come aboard as senior vice president in charge of retail.
The rankings track the top 100 highest-paid public company executives, regardless of title. Order is determined using the executives' pay as a percentage of their company's after-tax net profit, minus cost of capital, which Bloomberg refers to as economic profit.
Comments
It's not just the product that has to be good but everything that happens behind the product that we hoi polloi never see or really appreciate.
Go Cookie Go!
Very true. Kudos to SJ for hiring Tim!
I can't speak to that example as i have no knowledge and haven't DDGd it yet but sadly many execs realize they have a limited window of opportunity either personally or product wise, so make sure they create their golden nest egg ASAP. Share holders and employees seem rarely the top priority.
....pay as a percentage of their company's after-tax net profit, minus cost of capital, which Bloomberg refers to as economic profit.
Actually Economic Profit (or EVA) should be correctly defined as After-Tax Operating Income* minus Capital Charges**....
* More precisely, it is EBIT×(1–T) where EBIT is the Operating Income, and T is the tax rate.
** Capital charge is defined as Cost of Capital × Invested Capital
most profitable company, ceo who is in the Times most influential list, high customer satisfaction (depending on the product- the highest) ...
doomsayers unite!!
Then look at the CEO of GoPro who is making like $400 million this year.
Nick Woodman is also the founder of GoPro, and built the business from absolutely nothing. He made $285 million, mostly in stock grants -- Tim Cook made $378 million in 2011, also mostly in stock grants.
No need to senselessly bash an otherwise great executive.
Yup. For the profits Apple makes, Tim Cook is the least-paid CEO on the planet. Not that he cares, he always turns down his bonuses. Tim is a fantastic example of fiscal responsibility and accountability when it comes to CEOs, as well as lack of greed. Yes, he still gets paid a shitload of $$, but he generates infinitely more, and does not earn as much as he otherwise could.
And he does not take any dividends on his restricted stock unit. No other CEO of a major company does that, afaik.
Estimates are that he's left at least $75M on the table.
Your comparison is incorrect. Apple granted Cook that stock in two intervals. The first is if he stays to 2016. He receives half then. He receives the other half if he stays to 2020. So he hasn't been given any of that stock yet, which is worth much more than what it was when first granted, mostly because of his efforts.
But GoPro is a vastly smaller company. Whether Woodman started the company or not isn't the point. He sucks out a large share of the company's money. Money that could be used for R&D or marketing. In Apple case, what Cook earns is a tiny percentage, but what Woodman earns is a very large percentage. That's greed.
Numbers for GoPro:
https://www.google.com/finance?fstype=ii&q=NASDAQ:GPRO
Their founder/CEO isn't doing anything illegal or immoral by taking a large salary. Frankly, I've always viewed the available window for them to exploit their niche dominance as being very narrow anyway. They'll probably be out of business in five years or so because they add little to no value to this camera tech that is already commoditized.
Your comparison is incorrect. Apple granted Cook that stock in two intervals. The first is if he stays to 2016. He receives half then. He receives the other half if he stays to 2020. So he hasn't been given any of that stock yet, which is worth much more than what it was when first granted, mostly because of his efforts.
But GoPro is a vastly smaller company. Whether Woodman started the company or not isn't the point. He sucks out a large share of the company's money. Money that could be used for R&D or marketing. In Apple case, what Cook earns is a tiny percentage, but what Woodman earns is a very large percentage. That's greed.
Numbers for GoPro:
https://www.google.com/finance?fstype=ii&q=NASDAQ:GPRO
The point of my comment was to say that it's unfair to criticize Woodman, just because Tim Cook "only" took $70 million in compensation last year. Of course Woodman's comp is proportionally larger, but he's also in a much different situation and that grant won't hurt GoPro at all.
It's also worth noting that when Woodman received that grant, it was worth less than $30 million. It's only as high as it is now because the market has decided that the company is succeeding under his leadership and the stock price has increased significantly as a result.
While his critics make noise noise noise in the forums, hoping it will dent the universe. Sadly, it won't even make a dent in this forum.
His pay is determined by the board of directors at Apple.
Tim Cook is a good man. I'd like to shake his hand one day and tell him so. I don't always agree with him, but I respect him greatly.
I am not an Apple stock holder (was at one time, many many years ago and wish I had kept it
) but am glad he is at the helm of a company whose products make me a living and whose products I use all the time in my own life. A company which truly is changing the world, because they give a crap (about product design, functionality, and a myriad other things).
Of the Fortune 500 in 1955, 88% (440) are out of business.
When the "owner" dies, >95% of the companies eventually go out of business. Boeing, Ford, Apple, etc., are exceptions to the rule.
This "reverence" that America has for CEO's is largely misplaced. Most of them are slowly running the companies into the ground.
Tim Cook is an exception. Hiring Tim, is probably, the best thing Stevo did for Apple.
Best.
Actually, I think c
Of the Fortune 500 in 1955, 88% (440) are out of business.
When the "owner" dies, >95% of the companies eventually go out of business. Boeing, Ford, Apple, etc., are exceptions to the rule.
This "reverence" that America has for CEO's is largely misplaced. Most of them are slowly running the companies into the ground.
Tim Cook is an exception. Hiring Tim, is probably, the best thing Stevo did for Apple.
Best.
Actually, creating Apple is the best thing Stevo did for Apple (along with the Woz).