Tim Cook's Pay Was $1.5 Million Less in 2016 as Apple Missed its Own Performance Targets

[neliason]

I think people tend to have rose colored glasses for Apple under Jobs and whatever the opposite is for Apple under Cook. Jobs was far from perfect. He made bad decisions and they put out bad products under him. That said Jobs was a rare kind of man. He had a certain vision and drive that you don't often find. You'd not want him to be your father, or maybe your boss. But for the consumer he was great. You find these kind of men running their own company. You don't find them rising through the corporate ranks. So how likely is it that Apple will ever have a man like Jobs in charge again?

Cook has been a good CEO for a company Apple's size. That doesn't mean I'm not disappointed that some products aren't being updated or are being dropped altogether. I like the Apple ecosystem. I like the it just works, though I'm questioning whether this is as true today. But again people tend to have too rosy an outlook on the past. It isn't like Apple under Jobs never had some of the same issues.

 

[H2SO4]

We'll see... At the moment Apple appears to be following the path of many companies that out grow their core competencies. The company has got a lot bigger and a lot more complex but this size has been built on pretty much single product - the iPhone. It has, in my opinion made them fragile which that huge pile of money hides. This pile has cushioned them from customer feedback. Its made the moaning and whinging of longtime Apple users such as myself irrelevant. If Timmy and the gang can consistently come up with such ground breaking products (say one every 5 years) that pulls in ever increasing numbers into their orbit then yes he's a massive success and probably deserves the obscene amount of money he's getting.

However, if such products don't turn up and I would argue there was a lot of serendipity in the runaway success of the iPod / iTunes and the iPhone (arrogant music industry people, hugely complacent mobile phone companies, trendy designer user base making the products desirable etc etc) - then all he's done is allow the company to become hugely fragile and fall into the trap that many companies do that put share holder concerns above those of their customers.

Whilst I don't think you are wrong I think that such is the cushion of money they have built up, they can survive almost anything.

 

[asiga]

This man doesn't care about Apple. His only goal is to become president of the whole World. Whatever he does or says belongs to the field of politics or social engineering. Not Apple at all.

 

[NickD73]

Apple is drunk off the success Steve gave them. Bunch of dated buffoons running the show now.

 

[Labeno]

Apple isn't the same Apple, but still not sure if that is a bad thing or not. When you become the biggest player, you have more problems trying to please everyone. Not sure how Steve would've made things different.

Steve wouldn't have removed the magsafe concept from the new MBP, he would have created magsafe USB-C.
Steve would have included dongles for USB-A and HDMI.
He would not let the battery only have 10 hours if you only read emails and lightweight website. Much less if you did something 'Pro' level.
Steve understood what pro meant. Tim thinks it means fashion at an insanely extra cost.
Steve would have never created a $17,000 watch that used the $250 watch but added a tiny bit of gold (gold only cost $1300 per ounce).
Steve was not under the control of investors. Steve loved his customers.

 

[Adam Warlock]

He runs the company, which is a varied and difficult role and encompasses many different things. He does not design and create new products, despite what people on many forums think.

He steers the ship. Damnit, he can say, "Let's build some great new desktop Macs, and screw the anorexia fixation, Jony!" He can fire or at least reprimand the QA responsible(s), who seem MIA these last couple of years. He can have a talk with whoever is failing miserably to have enough product available at launch. Yes, he doesn't design or create new products, but he can certainly direct others to do so. Given his compensation is that too much to ask?

 

[navaira]

The MBP was released after the iPhone 7.

You've got a point! I forgot people at Apple aren't allowed to communicate with each other and when iPhone 7 was released nobody had any idea MBPs would have USB-Cs. I'd insert a shocked emoji but I don't have a Touch Bar.

Apple services chief Eddy Cue: $22,807,544

*tears hair out, screams, runs out of the room*

 

[TechGeek76]

Their latest, the W1, has completely changed the wireless headphone industry.

It changed it for only Apple users....

 

[Steve121178]

Angela made $23 million for what? Turning Apple into a fashion company? The watch that isn't selling as well?

Don't forget where it all started. Apple is a computer company, not a fashion brand. The two will not converge once computing power gathers pace again.

Apple creates premium consumer tech, software & services. The day's of them being primarily a computer company are long, long, gone. Hence why the Mac is merely an afterthought.

Apple's focus is this:

1. iPhone
2. Everything else

 

[Charles50]

Note the top salary in that group went to Angela Ahrendts. She is an expert at lifestyle branding, Apple is pivoting around her and the Apple Stores she recreated have unrivaled performance.

For all the trollish complaining about Tim Cook, please understand one thing. Cook is the King of the supply chain. Apple is a multibillion dollar company today, solely because of his ability to restructure the worldwide electronics supply chain around Apple's needs. If Apple can produce anything in today's market, it is solely due to Cooks ability to rule the supply chain to build whatever Apple wants to build. The only question is, what do they want to build next?

 

[jujufreeze]

Apple is a multibillion dollar company today, solely because of his ability to restructure the worldwide electronics supply chain around Apple's needs.

Apple is a multibillion dollar company today because Steve Jobs lead Apple from bankruptcy to prosperity and Tim Cook, a bean counter guru, was lucky enough to ride his coattails but lacks the necessary creative vision to lead an innovative company.

 

[Born Again]

Note the top salary in that group went to Angela Ahrendts. She is an expert at lifestyle branding, Apple is pivoting around her and the Apple Stores she recreated have unrivaled performance.

For all the trollish complaining about Tim Cook, please understand one thing. Cook is the King of the supply chain. Apple is a multibillion dollar company today, solely because of his ability to restructure the worldwide electronics supply chain around Apple's needs. If Apple can produce anything in today's market, it is solely due to Cooks ability to rule the supply chain to build whatever Apple wants to build. The only question is, what do they want to build next?

so are you happy with apple today?

 

[TechGeek76]

What that cost them was the future. What they should have been doing was making reasonable profits and going for market share, which was what we always tried to do.

I have seen so many people over the years claim Jobs didn't care about market-share, which is complete BS. Of COURSE they do.

 

[BoxerGT2.5]

What the heck do you do with $8.7 million in one year, let alone over $22 million? Yikes!

A lot of hookers and coke?

 

[Macs4u]

They all come across like they are wanting to change the world , and deeply care about this and love making the beeeeeest proooooducts. Total lies. They all have 1 goal and 1 goal only and that is to line their own pockets and take as much from the consumer as they possibly can, whilst they can. Eddy Cue's pay of $22 million is just ridiculous. $145 million in salary and unlocking of shares for Tim Cook is pure crazy. What does he do? He isn't creating visionary products , he's jetting round the globe with the same tone and keeping professionals in the dark over future plans. Apples products are obviously massively overpriced to make such huge profit margins which leads to such ridiculous pay packets.

 

[Labeno]

They've been incredibly profitable under his leadership, why would they fire a successful CEO who has increased profits, marketshare?

Here's apple last 5 years of gross profit:

Simple math concept: sell 1 item for $10 at 100% profit, you only make $10, or sell 1000 $8 items at 20% profit is $1600 profit.

Steve put customers first, which means he got a lot of customers buying the products (maybe at a lower profit margin). Tim does not care about customers, so less customers are buying (potentially at a higher profit margin).
This chart shows that under Steve, Apple made more profit overall.

Tim is only running Apple for profit, and could care less about customers. If Tim cared, he would not remove the magsafe concept from the new MBP, he would include free dongles, and he would not create a $300 glossy book stroking his ego. Tim is slowly killing Apple even though they are still making more profit than any other company out there. Wait a few more years and you'll see what I mean.

 

[ericinboston]

...and I bet his 3 million base is significantly lower than other, much less successful CEO's.

Not totally true...most CEOs (of PUBLICLY TRADED companies) earn a SALARY of between $500k and $1 mill. Their ENTIRE COMPENSATION PACKAGE is what earns them a lot of money (usually down the road)...stocks...which is reflective of how well they run the company...if the company does well, the CEO (and others) should be rewarded with stock...if the company does poorly, the amount of stock is less. Let's face it, the stock value appreciates or depreciates depending on how the company is doing. So even if a company did horribly and still kept the CEO's stocks the same, the CEO's value of those stocks would be far less.

Now, and I'm not aiming this at you Dave...what angers me is that there seems to be about 1% of Americans how have any clue on how/why CEOs and other 'C' executives at PUBLICLY TRADED companies are compensated. In no particular order...

1)CEOs have a massive responsibility...they drive the company...they may have 30,000 or 400,000 employees to ultimately manage...there could be office locations all over the globe, global markets, dozens of product lines, billions in sales, partnerships, etc. Look at companies like Microsoft or IBM or HP or GE or Siemens...massive companies....and those are just technology companies.

2)CEOs probably sleep 4 hours a night...every night...seriously...they are constantly working, traveling, driving company business plans. They are not sitting in their offices eating Bon Bons. Ever. They are out there working their butts off because a)the company cannot be complacent and b)the CEO's real compensation is the stock...it's the carrot. CEOs do get fired after 1-2 years on the job if they perform poorly so again, their comp is all about performance.

3)CEOs are compensated well because they are the small % of people who actually have the knowledge to run the business. CEOs typically only stay a max of 10 years because the Board wants change. CEO jobs are not filled each year or 2 like the dozens/hundreds of jobs within that company because the CEO is to be a long term leader...at the top...no higher place he/she can be promoted to...and of course have the skills.

4)CEOs are compensated well because when they are hired, that person is probably already a top dog at another company, earning a lot of money, AND RISKING LOSING stock/compensation if they leave. No Vice President candidate earning $1.5 total comp is going to leave and go work as the CEO for $2mill total comp.

5)CEO payouts are future-wise. As with Tim Cook, most CEO stock plans/compensation "vest" over 3-5 years. If the CEO quits before then, he/she is out of luck.


What I do agree with is there are some excessively overpaid CEOs in the USA. If it's a privately held company and you're the CEO/president and you started the business, hey, take every penny you want because it's your business...not the shareholders. But for publicly traded companies, my view is that there really should be some cap...whether it's a law or a simple verbal understanding. I don't think Tim (or any Apple CEO) deserves more than $20 mill a year in total comp even given Apple's size and value. Excessive is a relative term but I think CEOs who earn up to $10mill are paid very fairly...once you get over $10mill, I wonder why so much money needs to be paid to that person...again...for publicly traded companies. Take a look at some of these CEO (of publicly traded companies) payouts: http://www.aflcio.org/Corporate-Watch/Paywatch-2014/100-Highest-Paid-CEOs

 

[Rogifan]

I understand. But in your earlier post you referred to Mr. Federighi's stock grants having never been disclosed in SEC filings and I wanted to correct that as they are routinely disclosed.

As for why other aspects of his compensation aren't disclosed as they are with other executives, it's because he's not (in accordance with SEC rules) one of the named executive officers. Those are the CEO, the CFO, and the three highest compensated executive officers other than the CEO and CFO. So we can assume from the filings that Mr. Federighi's total compensation for this year (and previous years in which he was considered an executive officer but not a named executive officer) was less than that of the named executive officers (other than the CEO or CFO). This year, e.g., it was less than the $22,807,544 reported for Mr. Cue, Mr. Riccio and Mr. Sewell.

Apple listed 6 named executive officers, btw, because those three had the same compensation. So in a sense they were including the top 3 and ties (along with the CEO and CFO).

Why would his compensation be less than Cue and Riccio's? He's certainly not less important than those two.

 

[Adam Warlock]

Cook is the King of the supply chain. Apple is a multibillion dollar company today, solely because of his ability to restructure the worldwide electronics supply chain around Apple's needs.

Then why does nearly every goddamn product released under his watch have launch-date supply issues? The fact is Cook no longer takes care of the supply chain as far as I understand.

 

[jeremy h]

Whilst I don't think you are wrong I think that such is the cushion of money they have built up, they can survive almost anything.

I think in the short to medium term you're right. Nothing can really worry them. I always remember the phrase 'necessity is the mother of invention' these days when I look at their product line up.

 

[DG82016]

They've been incredibly profitable under his leadership, why would they fire a successful CEO who has increased profits, marketshare?

I may not be a fan of him, but using the metrics that business people use to measure success/failure. He's been an unabashed success.

The same was true of Steve Ballmer. By that metric, he was a success.

 

[9081094]

What does he actually do? He doesn't spur product updates unless it is a phone.

I don't understand your comment... was the iPhone 7 an update?

 

[JustMartin]

"Apple noted it did not meet its target performance goals for both net sales and operating income in 2016,"

Jobs from 1995:

"They didn't have a clue about how to do it and they didn't take any time to find out because that's not what they cared about. They cared about making a lot of money. So they had this wonderful thing that a lot of brilliant people made called the Macintosh and they got very greedy. And instead of following the original trajectory of the original vision -- which was to make this thing an appliance, to get this out there to as many people as possible -- they went for profits and they made outlandish profits for about four years. Apple was one of the most profitable companies in America for about four years.

What that cost them was the future. What they should have been doing was making reasonable profits and going for market share, which was what we always tried to do.

Macintosh would have had a 33% market share right now, maybe even higher, maybe it would have even been Microsoft, but we'll never know. Now it's got a single-digit market share and falling. There's no way to ever get that moment in time back. The Macintosh will die in another few years and it's really sad."
39:30

So, that quote is from just after the blessed St. Jobs realised they couldn't continue making the Next hardware, laying off over half of his staff and just before he sold the company to Apple? Of course Jobs is going to be anti-Apple at this point, because he saw them (particularly Sculley) as the enemy, this wasn't some high falutin business philosophy, this was Steve bashing Sculley, pure and simple.

 

[jujufreeze]

So, that quote is from just after the blessed St. Jobs realised they couldn't continue making the Next hardware, laying off over half of his staff and just before he sold the company to Apple? Of course Jobs is going to be anti-Apple at this point, because he saw them (particularly Sculley) as the enemy, this wasn't some high falutin business philosophy, this was Steve bashing Sculley, pure and simple.

SJ was no saint, but Apple wouldn't exist today without him ( he kind of saved the company from bankruptcy and changed the world's perception of consumer technology) His insights shouldn't be diminished.

 

[pentrix2]

Lol darn, only 8 mil this year.

$8 million but if you count the 137 million he now has access to makes it $145m hahaha