Apple CEO Tim Cook Earned Over $11 Million in 2019, Not Counting Stock Awards

[Carnegie]

I wonder "how much" and "what" taxes are on Stock awards vs if it was given in a normal salary. I'm betting there is a tax savings in stock awards.

The stock awards that Mr. Cook gets are, for tax purposes, treated pretty much the same as ordinary income. He owes taxes on them based on their value when they vest as if he received that same amount in cash. If he chooses to keep them past that point, then any gains (or losses) he realizes are, for tax purposes, treated as capital gains (or losses). It's the same as if he were paid in cash and used it to purchase shares.

When Mr. Cook's shares vest, whether he sells any at the time or not, Apple typically withholds more than 50% of those shares to meet tax withholding requirements.

The reason - or one important reason - for compensating executives through equity awards rather than salary is to more closely align their interests with those of shareholders.

 

[DNichter]

I wonder "how much" and "what" taxes are on Stock awards vs if it was given in a normal salary. I'm betting there is a tax savings in stock awards.

Probably. The awards likely vest after 5 or so years. They can be taxed twice if sold early on.

 

[I7guy]

Yup, crappy products, crappy key boards, forgetting about Mac pros... but strong dongle revenue to frustrated customers...

let’s be honest, all Tim did was be the ceo when the chinese market really opened up. And when the Chinese markets sneezed, Apple stocks got sick. No leadership there, just external forces at play.

A monkey could have been the ceo and apple would have been successful with the vision, products (software and hardware), and engineering teams that Steve left him.

Tim just let these teams run loose and people like John ivys went unchecked.

Tim has lost shareholders a lot of money, apple stocks could be much higher with someone who actually gave a crap about items products.

and want to talk about a CEO, let’s talk about MUSK!

To start with Musk is a terrible CEO, imo, however relevant to the topic that this is.

It's very difficult to explain Cook adding about $800B in shareholder value with the "riding on the coattails" meme and "a monkey could run Apple" meme.

And interesting conjecture about how Tim "lost" shareholders money vs the reality of what Apple's valuation was when he took the helm and what it is today.

Seems like a bit of revisionism going on in this post.

 

[44267547]

Sold all my Apple stock to help purchase my first home six months ago, which wasn’t much considering how much stock is these days and the cost of homes in Cali. These guys get the same amount of money handed to them to travel on personal aircrafts. Not bitter just wondering what I did wrong in life lol.

This is a great post.

To Me, it doesn’t sound like you did anything wrong, actually you seem a lot smarter than the ‘average house buyer’. You’re probably an extreme minority in your situation. You invested in Apple and essentially it paid off for you ‘long-term’ by affording you a house. Think about it for a minute, how many homebuyers would be in your situation where they use company stock/portfolio to pay for a house? I doubt that many, considering the majority have to divulge into their savings in order to put money down for a home. I had stock, sold it a while ago, I wish I would’ve kept it in retrospect.

But what we do know, Apple has the potential to make a lot of money for those who understand the market and went to invest.

 

[PickUrPoison]

This is why your iPhone costs so much.

Hardly.

Cook’s salary equates to 6¢ per iPhone

 

[delta0]

I wonder "how much" and "what" taxes are on Stock awards vs if it was given in a normal salary. I'm betting there is a tax savings in stock awards.

You pay normal tax like it was pay. This happens at the time the shares vest. The only difference is if the price goes up then when you sell them you may also have capital gains tax on the gain (based on difference between vest and sell price).

 

[Whathappened]

Write to Apple insisting they stop spending Billions buying back their own stock which mainly enriches the top executives...and without shareholder approval. That's money that could be spent on cutting prices on products, increasing one million serf wages paid to those building said products, paying stock dividends, and funding research and development.

seriously, I do have a heart for socialism, too, but unfortunately that is not the way the world works today.
Capitalism it is.

 

[ipponrg]

That’s true in general. But specifically with Apple, the price isn’t rising to $300 with crappy products, bad services, etc. there has to be some meat behind the stock price rise.

If you look at just Apple, sure. But if you look at the industry as a whole, a lot have risen near their all time highs. It does not feel it’s just their products that are driving their share prices up.

 

[Baymowe335]

If you look at just Apple, sure. But if you look at the industry as a whole, a lot have risen near their all time highs. It does not feel it’s just their products that are driving their share prices up.

What specifically? Apple has easily outperformed the broader market including the Nasdaq. Sure, some companies like NFLX and AMD have done better during specific time periods, but not everything has moved up at even close to the same rate as Apple and none have added as many dollars in shareholder value.

Apple is finally getting the respect their earnings have deserved for years.

 

[Costino1]

I was a young executive at a now defunct retailer 10 years ago. One thing people cant grasp is once you hit a certain level in a company, not even a C-Level executive; is that you live and breathe the company 24/7. The mentality of clocking in 9-5 is no longer. I'm not simply talking about replying to emails at midnight or waking up at 4am everyday (and weekends) to check the stock ticker and news, but every move you make is analyze by the company and shareholders. I gave up 5 years of my 20s to a company for a healthy paycheck.

Cook cannot run to his local bar and throw back a few drinks like a normal person does because this will cast a shadow not just on Cook, but Apple. Look at what happened to Elon and him smoking marijuana on the Joe Rogan show and the backlash that followed at Tesla and Wall St.....

 

[NufSaid]

Great to see salary staying in check.
I know 11 million is a bunch but compared to other CEO’s that is the median salary.

 

[macfacts]

Great to see salary staying in check.
I know 11 million is a bunch but compared to other CEO’s that is the median salary.

Keep reading the summary, it says with stocks, Tim got over 100 million.

 

[Labeno]

Cook earned 201 times more than the average employee compensation.

Cook earning over $113 million from shares that vested in 2019

Hmmm, "201 times" is not correct. Average employees don't get $113 million in stock, but Cook does, so that must be taken into account also...
($11,555,446 + $113,000,000) / $57,596 = 2,162 times

Welcome to the real world where CEOs make ridiculous amounts, but Cook didn't do 2,162 more work than any other employee. Capitalism is not fair, and it does not reward the hard worker... it almost exclusively only benefits the CEOs of companies.

 

[Devyn89]

Cool that means my boss made 220 times what I make a year 🤷‍♂️

 

[Abazigal]

Hmmm, "201 times" is not correct. Average employees don't get $113 million in stock, but Cook does, so that must be taken into account also...
($11,555,446 + $113,000,000) / $57,596 = 2,162 times

Welcome to the real world where CEOs make ridiculous amounts, but Cook didn't do 2,162 more work than any other employee. Capitalism is not fair, and it does not reward the hard worker... it almost exclusively only benefits the CEOs of companies.

I will say it rewards the value that one creates, rather than the absolute amount of hard work one puts in.

You are right in that Tim Cook doesn’t work 2 thousand times the hours that another worker puts in, but the work that he does creates 2000 times the value (or more). He’s tasked with deciding the direction of the company, directly affects the work that the people under him does, and makes everything come together. Without this direction, the engineers are not going to know what features to work on.

Think impact, not just raw man hours.

 

[Labeno]

I will say it rewards the value that one creates, rather than the absolute amount of hard work one puts in.

You are right in that Tim Cook doesn’t work 2 thousand times the hours that another worker puts in, but the work that he does creates 2000 times the value (or more). He’s tasked with deciding the direction of the company, directly affects the work that the people under him does, and makes everything come together. Without this direction, the engineers are not going to know what features to work on.

Think impact, not just raw man hours.

That is well put. To be devils advocate, Cook was trained in high level business practices, in particular supply chain. Many engineers work just as hard working on low level things... the core iOS source code. Without each other, both would fail. The engineer is not seen at the high level, so they are not offered $113 million in stocks... it's not fair. I'm an engineer who left a company of 100 people because I didn't believe in what the company was making. The CEO begged me to stay because my skill was rare. For months they tried to replace me, and 6 months later the company dissolved. That CEO made about 100x what I was making, but without me the company failed because the CEOs great high decisions were moot without an underlying high quality product. Good decisions go both ways... I've never believe only CEOs should get the 1000x pay multiplier.

 

[Abazigal]

That is well put. To be devils advocate, Cook was trained in high level business practices, in particular supply chain. Many engineers work just as hard working on low level things... the core iOS source code. Without each other, both would fail. The engineer is not seen at the high level, so they are not offered $113 million in stocks... it's not fair. I'm an engineer who left a company of 100 people because I didn't believe in what the company was making. The CEO begged me to stay because my skill was rare. For months they tried to replace me, and 6 months later the company dissolved. That CEO made about 100x what I was making, but without me the company failed because the CEOs great high decisions were moot without an underlying high quality product. Good decisions go both ways... I've never believe only CEOs should get the 1000x pay multiplier.

Thanks for sharing. It sounds like in your situation, you certainly had leverage to negotiate for a better pay package, but it sounds like you simply had it with the company.

 

[Labeno]

Thanks for sharing. It sounds like in your situation, you certainly had leverage to negotiate for a better pay package, but it sounds like you simply had it with the company.

It was a weird situation, but after I left, I ended up with something amazing and I have stuck with it for many years now. I won't take it for granted.

 

[delta0]

If you look at just Apple, sure. But if you look at the industry as a whole, a lot have risen near their all time highs. It does not feel it’s just their products that are driving their share prices up.

A lot of companies have shifted their business models to services and subscription models which is having a strong impact on the share price.

 

[dmaxdmax]

seriously, I do have a heart for socialism, too, but unfortunately that is not the way the world works today.
Capitalism it is.

Share buybacks and absurd compensation are not fundamental elements of capitalism. After WW2 and through the 70s there were lots of rules limiting elements of capitalism while simultaneously, industries were built and millionaires were minted.

 

[Marcian]

And how much did children earn assembling iPhones for Mr. Cook?

 

[glowplug]

Based on where Apple is today, he earned every penny.

Is he 11 times smarter than the other Apple executives, and 100 times smarter than all of the other Apple employees? Probably not. But like most CEOs he does have a lot of influence on how his compensation is structured.

 

[danny842003]

Seems underpaid when you consider sports people get more and 99% of them have very limited education. Not including American sports and their exploitive college systems.

 

[Abazigal]

Is he 11 times smarter than the other Apple executives, and 100 times smarter than all of the other Apple employees? Probably not. But like most CEOs he does have a lot of influence on how his compensation is structured.

Well, intelligence is a very subjective thing. When Steve Jobs conceptualised the iPhone, I am sure he wasn't able to actually code any of the features found on it, even though he had a very clear vision of how he wanted the product to turn out. But at the end of the day, he helped put together one of the most successful gadgets in tech history, even though he may not have actually written a single line of code himself.

Likewise, the engineer who came up with the software keyboard design did so only because Steve Jobs was there to tell him precisely what he had to do. He was good at his job (software design), but likely would not have been able to come up with the design of the iPhone in a million years.

So to answer your question, I would say that Tim Cook is smarter than the other executives at the things that he needs to be better at. He can't design like Jony Ive, and that's fine, because that's what Jony Ive is around for. It doesn't look like he can code either, and that's why they have Craig Federighi and his department overseeing software. He probably has zero connections with the music industry, so that's where Eddy Cue comes in.

That's how a team works, no? You hire a team to do the things they do best so you can be freed up to focus on what you do best. I don't care say that Tim Cook is the best CEO there is and that there isn't anyone else who could have done a better job, but looking at how much Apple has grown since Steve Job's death, it's hard to argue with the results.

Credit where credit is due.

 

[burgman]

Yup, crappy products, crappy key boards, forgetting about Mac pros... but strong dongle revenue to frustrated customers...

let’s be honest, all Tim did was be the ceo when the chinese market really opened up. And when the Chinese markets sneezed, Apple stocks got sick. No leadership there, just external forces at play.

A monkey could have been the ceo and apple would have been successful with the vision, products (software and hardware), and engineering teams that Steve left him.

Tim just let these teams run loose and people like John ivys went unchecked.

Tim has lost shareholders a lot of money, apple stocks could be much higher with someone who actually gave a crap about items products.

and want to talk about a CEO, let’s talk about MUSK!

What’s the weather like on the planet you’re on?