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Apple CEO Tim Cook's 2019 Compensation Totaled Over $133 Million
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R&D doesn’t work that way either. Throwing more money doesn’t necessarily lead to better results.
I see a lot of people just refusing to accept the plain and simple reality. Tim Cook is paid that much because this reflects the value he has helped create for the company. And he is under no compunction to use that money for charity or some other cause any more than you or me are.
And everyone involved has been compensated for their labour.
Humans are driven by incentives.
In your reality, there should be a cap on incentives for leaders.
In your reality, the public sector > private sector.
By your logic, being innovative is somehow detrimental to the financial health of the company, while stagnating is somehow responsible for Apple's profits? I mean, that's the takeaway behind all the criticism I am seeing.
The more reasonable explanation is that Apple is innovating in ways that resonate with their main consumer base (and it shows in their profits), even if the small but vocal group here at Macrumours may not agree. Focusing on wearables over Macs just might be the right move in the long term.
I will give you Apple Watch which might be in development since Jobs days, Apple news is a joke I am sorry, and Airpods is no genius work its a wireless earphones and the whole industry is moving that way. Everyone saw that coming.
I think Tim's addition are non computer related like Apple Pay(finance) Apple tv+(movie production/streaming), Apple Arcade,
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If I was an investor that Tim Cook is making me $55B a year... I will not pay him $133M, I will be happy to pay him $10B. I still make $45B! Look at other companies with CEOs that ran them to the ground some of which are Yahoo, Lehman Brothers, Enron, Atari...
I agree with Apple News. However, the apparent success of Airpods can't be denied, regardless if everybody saw that coming.
Yes, good list of products.
So Tim Cook is underpaid?
The money Mr. Cooks is paid - through shares or otherwise - wouldn't otherwise go to, e.g., more R&D. Apple has plenty of money. It already spends what it thinks makes sense on things such as R&D. You don't just spend more money on something because you have it. You make decisions about what it makes sense to spend on various things.
Some people or companies are resource limited. They have to factor in how much money they have available when deciding to how much to allocate to different things. But Apple doesn't have that issue. If it thinks it makes sense to spend an additional $5 billion on R&D, then it can do that. If it doesn't think that makes sense, then it doesn't - and it having a few billion dollars more available need not affect that consideration.
Mr. Cook's compensation effectively comes out of earnings, not out of other operating expenses. (And, hopefully, over the long haul his contributions have increased those earnings by way more than his compensation.) If he didn't receive as much compensation Apple would, all other things being equal, have slightly greater earnings and retained earnings and likely, eventually, return more money to shareholders. His compensation effectively comes from shareholders. And as a group, we seem to be fine with Mr. Cook's level of compensation. We've continually voted overwhelmingly in support of the compensation the executives of the company receive. Shareholders, generally speaking, like executives' compensation to closely align those executives' interests with their own.
Meanwhile the retail enployees are part time so they don't have to give them full time benefits. And Tim Cook presents himself as a progrrssive liberal.
So you would prefer they give it away to their already wealthy heirs and estates and a little to the government in the form of taxes as opposed to foundations that have been proven to do good for the world?
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He receives this money based upon contracts that were drawn up years ago and his efforts the company. Should he break the contract and walk away from money? He's already pledged to give away a large chunk of it before he dies. If he stops collecting money he has earned, he won't be fulfilling that promise either.
Apple (primarily because of Cook) has already donated hundreds of millions of dollars in 2019 and 2020 and pledged to donate $2.5 billion more for CA housing alone.
I'm not wealthy by most standards but it doesn't take a wild imagination to spend $20 million a year.
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No one else would have been ousted if the stock failed to perform as it did so Cook deserves the credit and compensation.
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Wow, that’s high. Most states are in the 30s 🙁
Private or public, if you don’t mind answering?
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All employees benefit from Apple’s tremendous success. That’s what allows for stock options, high salaries and raises.
The buck stops with Cook. He can be fired anytime. The CEO isn’t always the highest compensated employee; it’s up to the shareholders.
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Amazed at the number of people who’ve disagreed with my post despite it being 100% factual.
The statement made was : “Stock performance is based on getting consumers to pay more.”
I claimed the statement was simplistic and I was correct, it IS simplistic, and any first grade economist will tell you that.
Factors that effect Stock Performance:
1. The economy. This is the big one. If the economy is bad then few stocks will do well.
2. Market conditions: stocks invariably do badly in a bear market.
3. Corporate health. Health is made up of a multitude of indicators - price of an item is NOT one of them. A company can do badly if a product is overpriced. Another indicator can be the supply chain. If the supply chain is weak then that can place a strain of the ability for the business to sell. Perceived CEO performance, increased competition and more are all valid indicators of stock performance.
Ultimately the name of the game is to sell as much as you can with the biggest margins without inviting regulatory involvement and scandal.
WalMart didn’t become big by getting consumers to pay more. They got big by paying suppliers LESS. They got big by limiting their costs to a minimum. They got big by everything EXCEPT getting consumers to pay more.
I agree with your main point that the statement is simplistic and generally wrong, but I disagree on some of the details you're giving.
I think people are conflating stock price and profits.
You maximize profits by finding the volume*margin sweet spot. So while "getting consumers to pay more" is, simplistically, the path to higher profits it's phrased in a way that price is chosen arbitrarily. That is not the path to higher profits. If you set the price too high, less people buy and the volume*margin product falls. The way to getting consumers to pay higher prices is to make your product more valuable and thus make consumers choose to put more of their limited wealth into buying what you're selling rather than what someone else is.
Stock price is a completely different beast. We like to believe that price is tied to the earnings of the company, but that's equally simplistic. As I've said before: the stock market is part piggy bank and part gambling den.
That's certainly not true. Most economies are in the toilet right now, and stocks like Apple are at all time highs. Even broader indices look remarkably unscathed given the current situation and future uncertainty.
This is phrased as a tautology: stocks do badly when stocks do badly. Did you mean something different?
While there is correlation between "fundamentals" and price over really long stretches of time, I think this is more religion than fact over shorter runs. Witness TSLA. In the short run, it's all about tea leaves and the stories we tell ourselves.
The best analogy for the stock market I've seen is the Keynesian Beauty Contest, where you're not trying vote for the person you think is most beautiful, but for the person you think everyone else will find most beautiful. It's a subtle difference, but when you're buying shares of stock with the intent to sell them again in the time frames most big investors do, it's less about the company itself and more about what you think someone else will pay you for the shares you want to sell. If you think people are going to be looking to buy stocks based on earnings, you'll focus on profitability. If you think people will buy anything with "blockchain" in the boilerplate, you won't care what the fundamentals are.
This effect is getting even further exacerbated by the rise of high speed algorithmic trading.
The exception is stocks you own for the dividends. In that case, what you're making from the shares is directly tied to the companies performance. There aren't a lot of pure dividend stocks around anymore-- it seems everyone wants to believe they're a growth stock or some kind of hybrid.
Truth is, if stock price were a direct function of profit, we wouldn't need a stock market.
My point was that there’s way too many people ego think it’s a simple correlation. As we’ve both demonstrated, there’s so much more to it.
BTW: you missed the word bear in point 2.
Agreed. I'm not really arguing your point. Truth be told, I mostly reacted to the idea that stocks follow the economy and then my fingers kept going.
I don't think I missed the word... A bear market is defined as stocks doing badly. It's like saying "the temperature falls when it gets cold".
Tesla loses money every year since it was created. SpaceX spent more every year then it brings in, the Solar Company had to be bought by Tesla to keep it out of bankruptcy, Boring Company has never made a dime, I am not sure how this is continuous track record of success.
-Tig
Musk is a founder, he created Tesla. So he is not just some CEO like Tim Cook and the others on that list. He is not overpaid at all. Without him, there would literally not have been a Tesla Motors.
You should probably go update Wikipedia if you are sure! https://en.wikipedia.org/wiki/History_of_Tesla,_Inc.
Musk was not a founder. Musk was VS investor across multiple rounds of funding. You could view his involvement and interest in the company as protecting his own investment
He might be depending on who is responsible for Apple success and riches. Is he the man with the plan, or is he just the face of the company and others are doing all the work?
Jobs was definitely underpaid.
jeff bezos' worth is in another universe
he should put a couple billion improving amzn customer service and fix how badly items are packed for shipment
he should put a couple billion improving amzn customer service and fix how badly items are packed for shipment
Tim was paid $133M mostly in stock when the company he runs made a profit of over $55 Billion last year.
Elon was paid $595M all in stock after the company he runs part time had a loss of over $800 Million last year.
I know which one I want to explain to stock holders.
-Tig
Elon was paid $595M all in stock after the company he runs part time had a loss of over $800 Million last year.
I know which one I want to explain to stock holders.
-Tig