Tim Cooks compensation reduction won't be distributed "to more deserving employees". And what is even meant by "more deserving employees". Employees who deserve the compensation more than the CEO?
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple CEO Tim Cook Taking Substantial Pay Cut in 2023 After Earning Nearly $100 Million Last Year
- Thread starter MacRumors
- Start date
- Sort by reaction score
Ok. I think my expectations on Tim & Apple have been allowed to drift a bit high along with their valuation. When I see hundreds of millions being tossed around or written off to benefit shareholders, I think of what else that 100mil could do to overwhelmingly solve problems that need only money thrown at them. But then I have to remind myself that they are in the business of making money, and doing it by repeat selling short-lifecycle disposable products. They‘re not actually in the business of solving the worlds problems, and what our broken tax laws incentivize them to contribute toward charitable causes is just that. So Tim leave 100mil on the table instead of doing something interesting with it. Well, ok then.
The number of shares he was granted (as a target) was actually reduced.
The way Apple does it is to set a dollar amount for the grant-date (straight line) value of the RSUs that it is going to award certain executives annually. For Mr. Cook it had been $75 million. That was the grant-date value of the RSU awards he received in the previous 2 years. For certain other executives the amount had been, and remained in FY2023, $20 million. For Mr. Cook, in FY2023 (i.e. in late September 2022), the amount was reduced to $40 million. The number of shares was determined by dividing that amount - $40 million - by the closing share price from the previous day. If the amount had remained $75 million, the number of shares in the RSU grant would have been almost doubled.
I'll note a few more things regarding this reduced RSU award. Mr. Cook won't begin to receive those shares until April of 2025 and he'll receive them, assuming conditions are met, over the next 2 years. Until then he'll be receiving shares from previous RSU awards. (The awards overlap such that, e.g., in 2025 he'd receive shares from the 2021, 2022 and 2023 awards). Also, the number of shares he ultimately receives might not be the target number of shares. The performance based shares could be less than or more than the target number. Since the portion of the grant which is performance based has been increased, the variability of the number of shares he ultimately receives has increased. Based on the target number or shares, his grant was reduced by 47% this year. But depending on performance, the actual reduction could end up being as large as 73% or as small as 38%.
As to the notion of having a heck of a time selling shares they receive as compensation because of the signal it sends the market or insider trading regulations, Apple's executives routinely sell all of their newly vested shares very soon after they receive them. It doesn't spook markets because it's what markets expect and complying with insider trading rules, in this context, isn't that difficult. They don't always sell them right away, but quite often they do.
Mr. Cook, e.g, has a decent sized existing holding of Apple shares which he established years ago - around $400 million worth. But he typically sells any new shares he receives as soon as he gets them. The last time he received a large block of vesting shares was in August of 2021 and he sold all of them (net of tax withholding) - about $350 million worth - the following day. Apple's daily trading volume is usually so high that selling that much stock in a short period of time isn't particularly difficult.
Mr. Cook may be giving a lot more today. We wouldn't necessarily know about it. We only know about some of his charitable giving because he did it in the form of stock which required SEC filings.
If you have a 2nd gen Pencil, then presumably you had a compatible iPad. If you replaced that iPad with one that is incompatible with your 2nd gen Pencil, that's your fault not Apple's.
This is what’s wrong with corporate America in a nutshell. He is but 1 man. Apple is thousand’s of employees all important. Why does 1 man deserve 100 million? Why not spread that wealth around to the other employees? Apple would survive even if he left.
I love the iPhone mini but I had to carry a battery pack or be within 6 feet of an outlet.
TheYayAreaLiving 🎗️
Suspended
How is it my fault when Apple decided to offer an incremental upgrade to the iPad and make the first-generation Apple pencil incompatible with the new 2022 iPad Pro?
I guess not offering Stage Manager first on non-M1 iPads was our fault too?
Tim will always do the right thing for both loyal customers and savvy shareholders.
Everything we say before we do it is all talk. That's the definition of a pledge which he and many other billionaires have taken. But based on Cook's track record with charitable causes and keeping his word, I would tend to believe his pledge along with Buffet and Gates over any other billionaires.
The great thing about money is that the one who has it can do whatever they like with it. The bad thing about money is that the one who has it has to listen to everyone else about what they should do with it. Cook is the only adult in the room because he walks the line between shareholder responsibility and responsibility to everyone else on the planet. If he gave his money as aggressively as you suggest, shareholders and the Apple board would worry about his future with the company and that would have dire consequences on more things than just Apple. If he hoarded it all (like most billionaires) so that only his immediate family could benefit upon his death, he would be just another rich old man looking to extend his name and legacy beyond his lifespan.
Ahh yes. These are the most pressing and damaging problems with the company that we must solve as soon as possible.
I think this is why Steve chose Tim as his predecessor, he knew that he wouldn't rock the boat and just keep it smooth sailing.
Actually there is research on this. It is is true that past a certain level of income, people do not become happier.
In my day it was milk, potatoes, eggs, rice and ketchup.
I remember hearing an adage about Bill Gates saying if he dropped a $20 bill on the floor he'd leave it behind because he earned more money in the time it would take to stop and pick it up...
Looks like Tim might have to pick up that $20 these days as he'll only be making about $1.53 per second.
[https://www.epi.org/publication/ceo-pay-in-2020/]
That's where these debates get stymied. If you look at Cook's compensation relative to other CEO's, it looks perfectly justified. If you look at CEO compensation relative to everyone else, they're all way out of proportion.
Putting on my investor’s hat for a moment here.
The shareholders are also not happy with the company as a whole, and that is apparent by the long, slow, ski-slope downward in the stock price now for more than a year. I am considering UNWEIGHTED index funds now because Apple has been such a poor choice in recent quarters, and unweighted funds will de-emphasize the FANG stocks, including Apple.
I’m not so sure right now which is worse: Inflation, taxes, or Apple’s steady decline.
Tim, being the face of this decline, SHOULD be taking a pay cut.
Never ascribe to incompetency that which can be explained by maliciousness.
Bill Gates is the single biggest landowner in all the US. And he wants us to start eating bugs. That’s not foolishness, it’s evil.
I have a problem with the whole spread the wealth attitude people have. An employee at the Apple Store doesn’t have the skills or qualifications to be a CEO of a company. Let alone one of the biggest companies around. CEOs do a lot more work than people think.
Employees should always get paid more, I’m not questioning that. But Tim Cook is able to make what he makes. Most of it is stocks (as people have mentioned with Steve Jobs only getting $1).
The stock price is largely being driven by things outside the business. We're still exiting the pandemic roller coaster. There was a massive shift in demand from services to goods that inflated tech stocks but is now reversing, there was a perception that some companies could better weather the remote work place, and there was a wash of money looking for safe havens in a zero interest world so tech stocks and real estate sopped up the funds.
Overall there was a bit of a tech bubble that's deflating now and Apple is doing well compared to most of its peers. Of course I wish I'd had this level of clarity on the world a year ago, but ain't that how it goes?
Lean times. Good luck Tim. I figure that's 40 times more than I'd ever earn in my entire lifetime, but presume his work is likely 1500 times more relevant.