December 28, 2012
Did Apple CEO Tim Cook Get A Raise Or Take A Pay Cut In 2012?
Michael Harper for redOrbit.com — Your Universe Online
Tim Cook took the reins at Apple in the second half of 2011, succeeding co-founder and iconic CEO Steve Jobs. Not long after Cook stepped up to the role on August 24, 2011, SEC filings revealed Apple had awarded Cook with 1 million shares of APPL stock, but only if he stayed on board for 10 years. Fifty percent of these shares are set to vest on August 24, 2016, the other half in 2021.
Thus began the claims that Tim Cook is the highest paid CEO in the world. When the board at Apple promised Cook these shares, they were worth a total of $383 million. When tacked onto a base salary, it seems like a really nice bonus. Cook´s base salary, however ($900,000) didn´t put him anywhere close to the top paid CEO in the world.
So, when Apple submitted their regulatory filings for 2012 to the SEC earlier this week, many were surprised to see that Tim Cook´s paycheck was far less than it had been a year earlier, when it was fattened with tons of Apple shares.
All told, Cook is set to receive a $4.17 million paycheck this year for a job well done.
The Alabama-born CEO received a $2.8 million bonus in addition to a $17,000 company contribution to his 401(k). The remaining $1.4 million makes up his base pay, meaning he actually received a significant pay raise this year.
Tim Cook did not receive any extra shares this year as he did last year, though he did have $140 million worth of shares vest in 2012. However, he was granted these shares before he stepped into his new role when he was acting as Chief Operating Officer.
The significant difference between $383 million and $4.17 million has caused some news sources to claim that Cook actually took home less money this year than he had last year.
Though Tim Cook missed out on extra Apple shares this year, other executives had been granted this stock, earning them large bonuses which will vest in the coming years.
According to the Associated Press, Bob Mansfield (who announced his retirement earlier this year only to change his mind shortly after) received shares totaling $83 million in 2012, while CFO Peter Oppenheimer and general counsel Bruce Sewell both received stock grants totaling $66 million. As Apple´s stock continues to climb over year´s past, these shares will likely end up earning these board members and executives a nice chunk of cash once they vest.
Though many wrongly assumed Tim Cook had taken a 99% pay cut this year, (an eye-catching headline if ever there were one) he is in all reality earning 99% more than Steve Jobs when he was CEO.
Jobs famously took a salary of only $1.00 in the last years of his leadership at Apple, opting for stock options and other incentives instead. Like many other executives and board members, Jobs also had other financial interests which contributed to his annual income.