Apple Strips CEO Cook of $4M in Stock Grants for Poor Share Performance
Apple CEO Tim Cook received a compensation package of $4.25 million for the 2013 fiscal year, a 2% increase over the year before.
Sun, December 29, 2013
Computerworld — Apple CEO Tim Cook received a compensation package of $4.25 million for the 2013 fiscal year, a 2% increase over the year before.
But the board also dinged Cook to the tune of nearly $4 million in stock vesting reductions, citing Apple's subpar performance compared to the S&P 500's for the 12-month period.
In a preliminary proxy statement filed Friday with the U.S. Securities and Exchange Commission (SEC), Apple spelled out Cook's compensation for the period ending Sept. 28, as well as that for four other executives: Eddie Cue, who heads Apple's online efforts; CFO Peter Oppenheimer; Daniel Riccio, the company's hardware engineering lead; and Jeffrey Williams, chief of operations.
Riccio, new to the named executives in the proxy, was formerly the hardware lead for the iPad. In mid-2012 he was picked to take Bob Mansfield's place as head of all hardware engineering. Cue is also a proxy debutante.
Cook received $1.4 million in salary, $2.8 million in a bonus, and less than $60,000 for sundry expenses, including Apple's contribution to his 401(k) plan, company-paid life insurance, and $35,000 for vacation time converted to cash.
For fiscal 2013, Cook and the others received the maximum bonus, twice each man's annual salary. According to Apple, the company's net sales and operating income exceeded the targets set previously by the board, triggering the big bonuses.
Cue, Oppenheimer, Riccio and Williams were awarded bonuses of $1.75 million atop their $866,000 salaries, for a total of approximately $2.6 million each.
Apple touted what it called "internal equity" in pay for the executives just below Cook on the company's org chart. "Because the Company's executive officers operate as a team, the Compensation Committee considers internal pay equity to be an important factor in the Compensation Committee's decisions," the proxy read.
That practice is in contrast to that of other companies. At Microsoft, for example, top executives did not receive the same salary or bonuses in fiscal 2013. COO Kevin Turner's salary was 16% higher than the next-highest named executive (and 12% higher than CEO Steve Ballmer's), while his bonus was 35% greater than the next-largest.
While none of the Apple executives, including Cook, were granted stock awards in 2013, the CEO is still enjoying the fruits of the massive grant given him in 2011 when he assumed the chief executive role a month before co-founder Steve Jobs died. Then, the board locked in Cook with 1 million shares that would vest in equal parts in August 2016 and August 2021.