Apple’s CEO Tim Cook received the largest single pay package awarded in about a decade when he replaced Steve Jobs, Apple co-founder, in August of 2011, shortly before the Silicon Valley legend’s death in October last year.
According to the Telegraph, the steep decline in annual compensation comes as Mr Cook faces growing pressure from Wall Street to sustain the company’s stellar growth rate.
Shares in the Californian company have tumbled almost 30pc since reaching a record in September as investors fear the increased competition Apple faces from Amazon, Google and Microsoft.
Cook was granted a massive amount of stock options totaling more than $376 million when he was promoted to CEO in 2011, much of which will vest in the coming years.
Given that, Apple’s Compensation Committee decided not to grant Cook any additional stock options this year, which is why his pay out appears so much lower.
The total includes $1.36 million in salary and $2.8 million in incentive-plan compensation for the fiscal year that ended in September, Apple said Thursday in a regulatory filing. So in general the Apple CEO made just $4.17 million in 2012.
That is certainly a salary many workers would be happy to have, but it represents a 99% decline from the $376 million Cook was paid last year.
Despite the increase, Apple said Cook’s target annual cash compensation is “significantly below the median annual cash compensation level for CEOs at peer companies.” It also said that Cook will not receive any stock awards for 2012.
“It pales by comparison because last year’s million-share grant was highly extraordinary,” said Brian Foley, a compensation expert with Brian Foley & Co. “There are other executives who remain unnamed at other companies who would be tempted to go for every last candy in the dish.”
That package was 14 times higher.
Virtually all of Cook’s $376 million stock bonus in 2011 was in awards that vest in two chunks – one in 2016 and the other in 2021. This structure was intended to keep Jobs’ longtime lieutenant at the helm for many years, as the value of the stock will depend on how well the company is doing in 2016 and 2021.
In addition, four top executives at the technology company received large stock awards this year. The company recently began granting large restricted stock awards to certain executives every two fiscal years, creating sharp swings in pay packages, Apple said in its Securities and Exchange Commission proxy statement.
Peter Oppenheimer, Apple’s chief financial officer, will receive $68.6m in compensation this year after Apple awarded him stock options that are valued at $66.2m
Bob Mansfield, the company’s hardware chief, received compensation valued at $85.5 million this year, nearly all of it from stock awards. Mr. Mansfield told the company in May that he intended to retire, which resulted in changes made to the vesting dates of his previously granted stock awards, but he later convinced to stay.
Still, it’s a striking drop in pay, especially when you consider that several other top Apple executives who work under Cook made more than 10x as much as him this year thanks to the stock options they were awarded, says the Mashable.