Apple's Tim Cook was second highest paid US CEO in 2019

Posted:
in General Discussion edited July 2020
Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

Credit: Time
Credit: Time


The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.

According to Bloomberg 2019 Pay Index, Cook ranks in second behind Tesla CEO Elon Musk in a list of the highest paid U.S. CEOs.

Musk earned $595.3 million in 2019, about four times higher than Cook. According to Bloomberg, that's primarily because of the pay deal he scored a few years before.

In third place was Tom Rutledge, CEO of Charter Communications, with annual compensation of $116.9 million. Other tech CEOs on the list include Alphabet and Google executive Sundar Pichai, with $86 million in earnings, and Microsoft CEO Satya Nadella with $76 million.

Cook is well-known for his philanthropic tendencies. In 2019, it was reported that he gave away $5 million of owned company stock to an unidentified charity. That comes several years after Cook said he would donate the majority of his wealth to charitable causes in a "systematic approach" to philanthropy.
«1

Comments

  • Reply 1 of 21
    hentaiboyhentaiboy Posts: 1,249member
    #5
    Sumit Singh of
    Chewy Inc.
    🐶+🐱=💲
  • Reply 2 of 21
    davendaven Posts: 638member
    No wonder my Charter internet bill is so high. 
  • Reply 3 of 21
    chadbagchadbag Posts: 1,670member
    Does anyone know if this is actual vested stock or new grants that have yet to vest?  (And what the vesting schedule is)
  • Reply 4 of 21
    KuyangkohKuyangkoh Posts: 817member
    daven said:
    No wonder my Charter internet bill is so high. 
    Hahahahaha....makes me wonder too
  • Reply 5 of 21
    JWSCJWSC Posts: 1,169member
    Gotta love it.  A $3 million base salary.  And it doesn’t even begin to accurately depict Tim’s true compensation.
    Beatstmay
  • Reply 6 of 21
    chasmchasm Posts: 2,482member
    Reminder: that most of his compensation comes in the form of stock should be considered theoretical, since it is based on the value of the stock today. If the stock market plunges, or some other issues happen to devalue that stock, or he resigns/dies before it vests, all that money goes poof.

    Or, if Apple continues to be as well-run as it is and Tim stays put, that theoretical money could increase.

    me, I’m a “take the cash and run” kind of guy. 😀
    williamlondon
  • Reply 7 of 21
    carnegiecarnegie Posts: 992member
    chadbag said:
    Does anyone know if this is actual vested stock or new grants that have yet to vest?  (And what the vesting schedule is)
    Not sure how Bloomberg is arriving at the number it did for Mr. Cook. But he had $113.5 million worth of stock vest in August of 2019. Today those shares would be worth about $215 million. But we should keep in mind that more than half of them were withheld for tax purposes, so he didn't actually get nearly that much worth.

    As of the end of 2019 (both Apple's fiscal year and the calendar year), Mr. Cook had a total of 1,260,000 time-based RSUs and 560,000 performance-based RSUs remaining from the award he got in 2011 that were set to vest in 2020 and 2021. Those shares would be worth nearly $700 million today.

    Mr. Cook didn't receive any new RSU awards in 2019 and hasn't received any since 2011, when he became CEO.
    edited July 2020 Rayz2016viclauyycronnFileMakerFellerspock1234
  • Reply 8 of 21
    mpantonempantone Posts: 1,798member
    chadbag said:
    Does anyone know if this is actual vested stock or new grants that have yet to vest?  (And what the vesting schedule is)
    As mentioned by Carnegie, Cook receives both time-based and performance-based grants.

    My guess -- based on Tim's public persona of fairness and equality -- is that his time-based grants are on the same vesting schedule as those of his line employees. In Silicon Valley, this has long meant 20% of the grant's shares vesting one year after the date of the grant followed by 2% additional vesting each month. Thus, to be 50% vested, it would take 1 year + 15 months. To be fully vested for that specific grant, it would take 1 year + 40 months = 4 years + 4 months.

    Tim's sense of fairness shows up a bit in his $3 million salary. He is not playing that $1 annual salary game. He is still contributing to the regular social welfare pots: Social Security, Medicare, SDI, etc. plus other things like a pre-tax medical account ("cafeteria plan") and a long-term care policy. The rest of it is likely withheld for federal and state income taxes. I bet his actual bi-weekly pay stub is less than $50 net.

    Silicon Valley has a nickname for these time-based grants; they are known as "golden handcuffs" because they incentivize the employees to remain with the company.

    His performance based grants are probably described in the company's SEC filings. Note that these types of performance-based grants for senior executives don't automatically vest. They are reviewed and approved by the Board of Directors' compensation committee. Often, performance based grants are not fully granted if the company's performance falls short of the goals set in the grant. In this case, it is usually not an all-of-nothing deal and the compensation committee reduces the amount of awarded grant.

    The Bloomberg figure would have to be that of exercised grants. An unexercised grant -- even if fully vested -- is still theoretical money. Cook -- like others in his category -- periodically exercise vested grants for the primary purpose of portfolio diversification. 

    Of course, the IRS does not care about unvested, unexercised grants. The only figure that is truly important is the value of the exercised grant. That is the number that the IRS (and Franchise Tax Board for Tim) look at.

    My guess is that Tim also donates some of his fully appreciated stock to charitable organizations. There is a considerable tax benefit to donating equities.
    edited July 2020 ronnFileMakerFeller
  • Reply 9 of 21
    jeffharrisjeffharris Posts: 657member
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.
  • Reply 10 of 21
    All on the backs of his H1B slave labor while crushing the American middle class.  
    cat52
  • Reply 11 of 21
    SpamSandwichSpamSandwich Posts: 33,407member
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.
    Let me know when you find someone better for the job and they can volunteer to work for free.
    viclauyycRayz2016razorpit
  • Reply 12 of 21
    MarvinMarvin Posts: 14,755moderator
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.
    In isolation maybe but far less obscene than investment managers making billions from buying shares in the company and contributing literally nothing to its success:

    https://www.marketwatch.com/story/carl-icahns-2-billion-apple-stake-was-a-prime-example-of-investment-inequality-2016-06-07

    Steve Jobs built multiple companies from the ground up over the entire course of his life and had a net worth around $10b as a result. Some random guy buys some shares and makes 1/5th of that in 3 years.

    If shareholders are going to be rewarded like that then so should the people who build the company into what it is. What I feel is the obscene part is not the award but that it doesn't apply to all employees, right down to the frontline workers. Companies should legally have to compensate all their employees with bonuses from the company's profits because they certainly get pay reductions and layoffs when a company makes losses.
    auxioronnFileMakerFellerspock1234
  • Reply 13 of 21
    carnegiecarnegie Posts: 992member
    mpantone said:
    chadbag said:
    Does anyone know if this is actual vested stock or new grants that have yet to vest?  (And what the vesting schedule is)
    As mentioned by Carnegie, Cook receives both time-based and performance-based grants.

    My guess -- based on Tim's public persona of fairness and equality -- is that his time-based grants are on the same vesting schedule as those of his line employees. In Silicon Valley, this has long meant 20% of the grant's shares vesting one year after the date of the grant followed by 2% additional vesting each month. Thus, to be 50% vested, it would take 1 year + 15 months. To be fully vested for that specific grant, it would take 1 year + 40 months = 4 years + 4 months.

    Tim's sense of fairness shows up a bit in his $3 million salary. He is not playing that $1 annual salary game. He is still contributing to the regular social welfare pots: Social Security, Medicare, SDI, etc. plus other things like a pre-tax medical account ("cafeteria plan") and a long-term care policy. The rest of it is likely withheld for federal and state income taxes. I bet his actual bi-weekly pay stub is less than $50 net.

    Silicon Valley has a nickname for these time-based grants; they are known as "golden handcuffs" because they incentivize the employees to remain with the company.

    His performance based grants are probably described in the company's SEC filings. Note that these types of performance-based grants for senior executives don't automatically vest. They are reviewed and approved by the Board of Directors' compensation committee. Often, performance based grants are not fully granted if the company's performance falls short of the goals set in the grant. In this case, it is usually not an all-of-nothing deal and the compensation committee reduces the amount of awarded grant.

    The Bloomberg figure would have to be that of exercised grants. An unexercised grant -- even if fully vested -- is still theoretical money. Cook -- like others in his category -- periodically exercise vested grants for the primary purpose of portfolio diversification. 

    Of course, the IRS does not care about unvested, unexercised grants. The only figure that is truly important is the value of the exercised grant. That is the number that the IRS (and Franchise Tax Board for Tim) look at.

    My guess is that Tim also donates some of his fully appreciated stock to charitable organizations. There is a considerable tax benefit to donating equities.
    So Mr. Cook's award was actually for 10 years. When he became CEO in 2011 he received an RSU award of 1,000,000 shares, half of which was to vest in 5 years and the other half of which was to vest in 10 years. A little bit later they changed the award some. Apple shares have since split 7:1, so I'll give the split shares numbers for what it was changed to.

    With the changes, 8% of the total of 7,000,000 shares was to vest each year. That's 560,000 shares a year - 280,000 time-based and 280,000 performance based, depending on how Apple stock does. The other 20% of the award was to vest 10% after 5 years and 10% after 10 years, with those blocks just being time-based. So in 2016 Mr. Cook received an extra 700,000 shares and he's set to receive an extra 700,000 shares in 2021. Most, but not all, of his performance-based shares have vested over the years.

    Mr. Cook has received no other RSU awards since he's been CEO. I'd add that he's voluntarily declined the dividend equivalents he's been entitled to based on his unvested RSUs (and which others in the company receive based on their unvested RSUs). That's already more than $76 million worth of dividend equivalents he's turned down.
    edited July 2020 viclauyycRayz2016ronnspock1234
  • Reply 14 of 21
    no surprise, sign of the times "Globalization" related!.
  • Reply 15 of 21
    entropysentropys Posts: 3,464member
    Marvin said:
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.
    In isolation maybe but far less obscene than investment managers making billions from buying shares in the company and contributing literally nothing to its success:

    https://www.marketwatch.com/story/carl-icahns-2-billion-apple-stake-was-a-prime-example-of-investment-inequality-2016-06-07

    Steve Jobs built multiple companies from the ground up over the entire course of his life and had a net worth around $10b as a result. Some random guy buys some shares and makes 1/5th of that in 3 years.

    If shareholders are going to be rewarded like that then so should the people who build the company into what it is. What I feel is the obscene part is not the award but that it doesn't apply to all employees, right down to the frontline workers. Companies should legally have to compensate all their employees with bonuses from the company's profits because they certainly get pay reductions and layoffs when a company makes losses.
    I actually believe there is quite a bit of difference between the actual business owner (the shareholders) risking their capital and an employee though.  And I don’t think it is reasonable for the executives and directors to have awarded themselves such largess in comparison with the myriad workers in the business either. The only good thing about share remuneration is that it gives the executive skin in that capital risk. That said, why are they such obscene amounts? Would Cook have turned down the job if the share options were one tenth what he was offered?

    We end up with an elite with strong corporate and political connections all in bed with each other, and a large serf underclass. Social mobility declines.   Eoli and Morlocks. And we know what happened to the Eoli in the end.

    At least Cook has been making profits, not sure what the Musk story is. Share price driven dependent on political connections rigging the market for Tesla.
    edited July 2020 ronn
  • Reply 16 of 21
    viclauyycviclauyyc Posts: 822member
    entropys said:
    Marvin said:
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.
    In isolation maybe but far less obscene than investment managers making billions from buying shares in the company and contributing literally nothing to its success:

    https://www.marketwatch.com/story/carl-icahns-2-billion-apple-stake-was-a-prime-example-of-investment-inequality-2016-06-07

    Steve Jobs built multiple companies from the ground up over the entire course of his life and had a net worth around $10b as a result. Some random guy buys some shares and makes 1/5th of that in 3 years.

    If shareholders are going to be rewarded like that then so should the people who build the company into what it is. What I feel is the obscene part is not the award but that it doesn't apply to all employees, right down to the frontline workers. Companies should legally have to compensate all their employees with bonuses from the company's profits because they certainly get pay reductions and layoffs when a company makes losses.
    I actually believe there is quite a bit of difference between the actual business owner (the shareholders) risking their capital and an employee though.  And I don’t think it is reasonable for the executives and directors to have awarded themselves such largess in comparison with the myriad workers in the business either. The only good thing about share remuneration is that it gives the executive skin in that capital risk. That said, why are they such obscene amounts? Would Cook have turned down the job if the share options were one tenth what he was offered?

    We end up with an elite with strong corporate and political connections all in bed with each other, and a large serf underclass. Social mobility declines.   Eoli and Morlocks. And we know what happened to the Eoli in the end.

    At least Cook has been making profits, not sure what the Musk story is. Share price driven dependent on political connections rigging the market for Tesla.
    I am sure Apple will be just fine with other very capable CEO. But Tesla and SpaceX will be guarantee doom without Elon. Just not too CEO will bid their live saving in their companies. Not to mention, Musk is the key of the technology and vision of these companies.
  • Reply 17 of 21
    anantksundaramanantksundaram Posts: 20,324member
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.
    You're just plainly jealous. A lot of that around here.

    Btw, the number is $133,700,000.00
    razorpitSpamSandwichspock1234
  • Reply 18 of 21
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.

    *sigh*

    It's not how much he gets paid, but what he does with that money, and generally speaking, he does good with it.  Apple is still hiring, and with that news, he's growing a company in a time of economic contraction, and for that, he deserves praise.
    spock1234JWSCviclauyyc
  • Reply 19 of 21
    Rayz2016Rayz2016 Posts: 6,957member
    Apple CEO Tim Cook came in second in a ranking of the highest paid U.S. CEOs in 2019, behind only Tesla's Elon Musk.

    The Apple chief executive earned annual compensation totaling $133.7 million in 2019. Cook's base salary that year was $3 million, with $7.7 million in bonuses, $884,000 in perks, and the remaining $122.2 million coming from stock awards.
    Sorry, but $133,700,00.00 is obscene.
    A tiny percentage of it is cash. 
    The rest is about what Apple makes in a single day. 
    spock1234
  • Reply 20 of 21
    mpantonempantone Posts: 1,798member
    carnegie said:
    mpantone said:
    chadbag said:
    Does anyone know if this is actual vested stock or new grants that have yet to vest?  (And what the vesting schedule is)
    As mentioned by Carnegie, Cook receives both time-based and performance-based grants.

    My guess -- based on Tim's public persona of fairness and equality -- is that his time-based grants are on the same vesting schedule as those of his line employees. In Silicon Valley, this has long meant 20% of the grant's shares vesting one year after the date of the grant followed by 2% additional vesting each month. Thus, to be 50% vested, it would take 1 year + 15 months. To be fully vested for that specific grant, it would take 1 year + 40 months = 4 years + 4 months.

    Tim's sense of fairness shows up a bit in his $3 million salary. He is not playing that $1 annual salary game. He is still contributing to the regular social welfare pots: Social Security, Medicare, SDI, etc. plus other things like a pre-tax medical account ("cafeteria plan") and a long-term care policy. The rest of it is likely withheld for federal and state income taxes. I bet his actual bi-weekly pay stub is less than $50 net.

    Silicon Valley has a nickname for these time-based grants; they are known as "golden handcuffs" because they incentivize the employees to remain with the company.

    His performance based grants are probably described in the company's SEC filings. Note that these types of performance-based grants for senior executives don't automatically vest. They are reviewed and approved by the Board of Directors' compensation committee. Often, performance based grants are not fully granted if the company's performance falls short of the goals set in the grant. In this case, it is usually not an all-of-nothing deal and the compensation committee reduces the amount of awarded grant.

    The Bloomberg figure would have to be that of exercised grants. An unexercised grant -- even if fully vested -- is still theoretical money. Cook -- like others in his category -- periodically exercise vested grants for the primary purpose of portfolio diversification. 

    Of course, the IRS does not care about unvested, unexercised grants. The only figure that is truly important is the value of the exercised grant. That is the number that the IRS (and Franchise Tax Board for Tim) look at.

    My guess is that Tim also donates some of his fully appreciated stock to charitable organizations. There is a considerable tax benefit to donating equities.
    So Mr. Cook's award was actually for 10 years. When he became CEO in 2011 he received an RSU award of 1,000,000 shares, half of which was to vest in 5 years and the other half of which was to vest in 10 years. A little bit later they changed the award some. Apple shares have since split 7:1, so I'll give the split shares numbers for what it was changed to.

    With the changes, 8% of the total of 7,000,000 shares was to vest each year. That's 560,000 shares a year - 280,000 time-based and 280,000 performance based, depending on how Apple stock does. The other 20% of the award was to vest 10% after 5 years and 10% after 10 years, with those blocks just being time-based. So in 2016 Mr. Cook received an extra 700,000 shares and he's set to receive an extra 700,000 shares in 2021. Most, but not all, of his performance-based shares have vested over the years.

    Mr. Cook has received no other RSU awards since he's been CEO. I'd add that he's voluntarily declined the dividend equivalents he's been entitled to based on his unvested RSUs (and which others in the company receive based on their unvested RSUs). That's already more than $76 million worth of dividend equivalents he's turned down.
    I am unsure whether or not I should be impressed by your detailed knowledge of Tim Cook's compensation package. Perhaps you have more free time on your hands to consider such matters than I. That's fine, everyone needs a hobby.

    There are some who believe that Mr. Cook is overcompensated and I won't argue with them, however there are plenty of other CEOs who deserve to be burned at the stake first.
Sign In or Register to comment.