“The iPhone 8 hasn’t even been launched yet but already it has one big, big winner,” Brett Arends reports for MarketWatch. “That would be Tim Cook, Apple’s CEO.”
“Cook will receive a $89.6 million bonus next week, based on MarketWatch calculations using information in Apple’s proxy statement,” Arends reports. “Buzz about the forthcoming phone has set Apple stock on fire this year, sending it up 39.5% and pushing the company’s stock-market value closer to $1 trillion. And that has come not a moment too soon for Cook.”
“Cook is in line to get a huge chunk of restricted stock units every year under the terms of his contract, but this year’s award was in peril before the latest rise in the stock price,” Arends reports. “Cook gets the full award each year so long as Apple is in the top third of the S&P 500 over the performance period — meaning it comes just 167th or better.”
Read more in the full article here.
MacDailyNews Take: As Arends mentions, Cook volunteered to introduce a performance-related element to his own awards back in 2013. Cook has also stated plans to donate his fortune to philanthropic causes.
A deal is a deal, as long as Cook met the criteria based on Apple’s performance, he has earned and deserves every penny of his magnanimous bonus.
“…but this year’s award was in peril before the latest rise in the stock price…”
…and as a gesture of good will and gratitude, Cook should contribute heavily to the Trump re-election campaign in 2020. 🙂
lol, just 34 fake downvotes in 15 minutes? c’mon ‘tards, I know you can do better than that…
“stay woke, muh-fuh’s, stay woke!”
Yes, a deal is a deal, and Apple should live up to it.
The reality is that it’s a bad deal. The deal is not “based on Apple’s performance” as you put it, but rather a manipulated stock price which is quite disconnected from Apple’s performance as a company.
First, Cook’s award should NOT be based solely (or even majorly) on the stock selling price — especially not a given point in time. There’s a lot more to Apple than the stock price.
In fact, very few investors base the price they are willing to pay for a stock on the company itself. They base it on what they expect the selling price of the stock to be in 1, 3, 6, or 12 months from now. (Yes, the performance of the company goes into that calculation, but for all too many companies — Apple included — the company’s performance is a minor factor in that equation.)
Second, if the board is going to stupidly tie Cook’s compensation to the stock price then it should be based upon the average over the preceding year, not a single point in time or even a month in time. After all, the award is for a year’s worth of effort.
At the very least even the bean counters on the board should have added into the equation the net book value of the company and the EBITDA & net, after tax profit for the year. Is Apple actually growing at its core? Is Apple really making more (net) money?
But, beyond the bean counters, I believe the board should have added into the equation the expansion or contraction of the customer base (across all product lines) during the year. Independent of the money, is Apple actually growing (or contracting). Is Apple building more products than ever but selling fewer (e.g., the last couple years under Sculley) or selling things as fast as they can make them across many product lines (e.g., the 2003-2007 era).
There should be many things that go into Cook’s compensation equation. It should not be a simple, “Is the stock going up faster than a certain group by a given day.”
But, the bottom line is that the board make a deal with Cook and they need to live with it. Hopefully, the board will wake up and change the deal.
you’re right, it is a bad deal…but it’s a done deal.
No person on Earth should or, better yet, needs such a disproportionate share of the world’s money. He and other extreme acquisitors of money are examples of disparity between the very rich and the very poor, the latter whom I often see along the river trail.
Wow, I was about to give botvinnik five stars for a really thoughtful comment.
But, just like Trump, he had to come back and show it ignorance in successive comments.
Dear MDN, the correct title is “Pipeline Timmy” 🙂
I suppose he’s earned the bonus. Apple is performing rather well. Apple may not qualify to be a FANG stock but it’s holding its own and showing some more potential this year.
He bowed to the fascist china govt and sold out the chinese people for his few shekels.
This SJW talks the talk, but not walk the walk.
Is this bonus a reward for unfathomably neglecting the Mac Pro or the Mac Mini or both? Maybe just Macs in general and the very thing that put Apple on the map?
I agree with some of the people posting here that the deal wasn’t written well and some aspects of Apple have been lagging or neglected : Macs (until recently) — Pro still missing, Apple TV and content etc.
One thing I’ll to point out though is that money does not seem to be a big Tim Cook motivator. If what I read about him a few years back still holds true he lives in a modest house, doesn’t have big spending habits etc and as MDN has pointed out has already said he wants to donate his savings to charity.
I’ve criticized TC before (throughly !) over Mac Pro etc but greed doesn’t seem to be one of his faults.
I don’t think giving him more or less stock is going to push him. Early on he even REFUSED more stock options.
I’m happy the stock is up by such a huge amount this year though.
( note Steve Jobs average was an astonishing about 35% a year stock growth for his second term ! As Business Insider calculated from Interim CEO on the stock grew about 6700%. If Tim cook was to match that in the SAME number of years Jobs had Apple market cap would need to rise to 23 Trillion dollars.
Jobs of course had a $1 a year salary and NO stock options from 2003 on ).
great post, especially the last two paragraphs.
Jobs was incredible.
The real issue is that more of this cash should go to the shareholders. Popular capitalism slides into jeopardy when people think that the managers receive too much over the orindary shareholders.
Troll me, but no one on earth has done anything meaningful enough to justify that kind of bonus, let alone Tim Cook. He is definitely competent, yes, but that’s all.
No one on Earth, yes.
Pipeline Timmy strenuously disagrees with you, serf.
A CEO getting paid extra for making their company lots of money? Wow, what an original concept!
Making parachutes out of gold is too expensive anyway. 😉