Though there are obvious benefits to performance-based pay, IRC Section 162(m), which limits the deductibility of executive pay was a major trigger of the shift in the 1990s.
Notably, the 162(m) limit of $1 Million has never changed.
As I said, it matters to the company.
But share-based compensation is still considered compensation for purposes of the deduction limitation.
There was an issue when it came to performance-based compensation not being subject to that limitation (and there are still some grandfather issues on that front). But compensation could be considered performance-based whether it was share-based or not. It wasn't the compensation being share-based rather than cash that mattered, it was whether it was performance-based or not. Time-based vested RSUs, e.g., were considered compensation for purposes of the deduction limitation even before the changes made by the Tax Cuts and Jobs Act.
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885K in perks?! What kind of perks are worth almost $1M a year? Seriously, I have an upcoming comp meeting and want to go in with some suggestions.
The vast majority of it was for security and travel expenses. Smaller portions were for 401K contributions, life insurance, and vacation pay.
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As noted in the article, they're counting awarded shares, not vested shares. Along with valuing stock options, you have to estimate a company's future stock price, so all of this is a bit speculative.
Personal use of the corporate jet. Personal days while on a business trip. Reimbursements for expenses that would normally be prohibited for the rank-and-file or by tax law, like alcohol, private clubs, fancy suits, haircuts etc.
They aren't counting awarded shares. Mr. Cook didn't receive any share awards in 2019. The number Forbes is using is actually close to the value of the unvested shares (as Apple valued them) that remained from his 2011 RSU award as of the end of Apple's 2019 fiscal year.
The share based compensation he did receive is valued based on when it vested. The only thing left that could be counted as compensation for him would be the dividend equivalents that others at Apple receive on their unvested RSUs. But Mr. Cook declines those, so they shouldn't be counting that amount. And, at any rate, I don't think they'd be enough - for 2019 - to make up the difference in the numbers.
EDIT: I should have referred to Bloomberg, not Forbes.
EDIT 2: To be clear, I’m referring Bloomberg’s numbers for Mr. Cook in that penultimate paragraph. In his case, Bloomberg couldn’t have been counting share awards received in 2019 as Mr. Cook didn’t receive any in 2019. And if, for some crazy reason, they were counting awards remaining as of the end of a given year, then their numbers still wouldn’t add up.
