Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Apple CEO Tim Cook's 2012 comp package plummets

Gregg Keizer | Jan. 3, 2013
Apple raised CEO Tim Cook's salary by 55% for 2012 and awarded him a $2.8 million bonus, but said the chief executive's pay was still "significantly below the median" of comparable firms.

The proxy statement also revealed that Cook recommended that Apple set stock ownership guidelines for the CEO and board members not employed by Apple. "Under the guidelines, Mr. Cook is expected to own shares of Company common stock that have a value equal to 10 times his base salary," the proxy stated.

Such guidelines were unnecessary before Cook's elevation to the CEO suite: Steve Jobs, who famously took an annual salary of only $1, owned approximately 5.5 million shares at the end of 2011.

By the new guidelines, Cook will be expected to retain at least $14 million in Apple stock, a way to insure that his fortunes remain tied to some extent with the company's.

"Stock guidelines, or even requirements, are very, very common, almost universal," said Lindner of WorldatWork. "Shareholders like to see that senior management has skin in the game. The board wants to make sure that [the CEO's] interest aligns with shareholders'. But 10 times base salary is very high -- typically it's five times -- and Apple is making a big statement here."

"Ten times for a CEO is a little bit above the norm, but it's not unheard of," countered Buford, the compensation consultant. "[Stock ownership guidelines] have been a growing trend, with most of the Fortune 100 having guidelines for top-tier management. And it's spilled over into most boards, too."

Apple also touted the 10-times benchmark. "This stock ownership requirement is among the highest of any CEO in the Fortune 100," the proxy stated.

The stock ownership guidelines may be just that, but for the CEO they're effectively requirements, the experts said. "A CEO is expected to follow them," said Lindner.

According to Apple, Cook currently owns shares worth about $7.35 million, meaning he will have to acquire almost as much again to meet the 10x guideline.

The ownership guideline and Cook's future stake in the company -- once his 2011 stock award vests -- is a way for Apple to maintain the philosophy that Jobs instilled, where top executives' paychecks, including the CEO's, were overshadowed by equity compensation or an existing equity position.

"There are other examples, including Apple's policy of not offering severance to executives, that shows they're proud that there are not a lot of frills [in compensation], and they're not just a bunch of [cash] greedy guys," said Buford. "They seem pleased to carry on that tradition."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is


Previous Page  1  2  3 

Sign up for Computerworld eNewsletters.