CEO Tim Cook's compensation cut by $1.5M following Apple's 2016 decline in sales
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.
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.
Comments
Apple execs get a pay cut for a slight decline in performance, yet Nadella still has a job at Microstupid.
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.
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.
still, I agree with the statement above. Hopefully this will be a kick in the pants for them
Nothing to do with stock prices or tech media BS. I really can't see where many of you read this.
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
and it's quite simple: the Mac Lineup is in the state it's in due to 1) the iPhone is the product that drives the company; 2) Apple's commitment to reduce churn in products (to avoid rapid obsolescence / devaluation); 3) their dependence on Intel to provide 'compelling' upgrades to the x64 computational platform 4) Apple's view that the world [read: the 99% of the buying public that doesn't write code, play computer games, or crashes molecules, planets, or TB databases together] wants lighter more portable products.
I [hopefully] think this is the same conundrum as in 1997-2004 where they had to 'dance with who brung ya' [GSeries chip], until they could get 1) the NeXTSTEP->MacOSX migration reasonably complete, AND the Intel Core/Xeon Chips were Price/Performance competitive with the PowerChips.
I do think that the A series chips will go to the MacOS line... but it's still 4-5 years out, not so much for the Ax chips, but for supporting chip set that provides all the stuff that iDevices don't have to deal with at the performance levels a 'real computer' has to.
I do think the Apple Execs take a very long view in their product pipeline [3+ years], and are compensated such that a couple million a year off the top is a 'pinch' and not a 'penalty' (If I have a x0,000 shares at 2010 $70 RSUs, the real benefit is still to grow stock price 20% over 3 years [remember this is the friction' highest capitalized public company in the free world 5% YoY is serious growth]).
Nothing to see here, business as usual.