“Apple Inc.’s Tim Cook has the best pay-for-performance rating of any chief executive officer on the Bloomberg Pay Index, the first daily ranking of the highest-paid U.S. executives,” Caleb Melby reports for Bloomberg.
“Cook was awarded $65.2 million in compensation last year. During the three fiscal years he has run Apple, revenue climbed 69 percent to $183 billion and net income grew 53 percent to $39.5 billion. Sales of iPhones more than doubled to $102 billion,” Melby reports. “The 54-year-old’s awarded pay package, which makes him the 17th-highest paid U.S. executive, is dwarfed by Apple’s three-year average economic profit of $28.6 billion, the index shows.”
Melby reports, “Cook’s pay is 0.2 percent of economic profit, the smallest fraction of any CEO in the ranking, showing that investors are getting a better return on each dollar they pay Cook.”
Read more in the full article here.
MacDailyNews Take: As we wrote back in January, “Cook is worth every penny and then some.”
Related article:
Apple CEO Cook more than doubled his paycheck to $9.22 million in 2014 – January 22, 2015
The executive pay one-upmanship game played by the boards of today’s Fortune 500 companies has created a severe imbalance between the value of those executives and the pay they’re getting. The stratospheric levels are seriously impacting the ability of these companies to deliver growth and reward employees. While Apple isn’t so much caught up in this game, and even if it were, it would at least be justified by the massive return, everywhere else, this is absurd, but there is simply nothing that can stop it.
Law requires that executive pay be made public. Whenever some company’s CEO’s pay package comes up for negotiation, the board will look at current average executive pay for others in the industry, and will reward their own with a package that will ALWAYS be higher than that average (after all, this signalises to them that their CEO is better than at least half of others in the industry). It is impossible to imagine some board of directors giving their CEO play that is lower than the majority of competitors; first, it would (presumably) eliminate major reason for motivation; second, it would tell everyone that the board themselves think their CEO is not better than others.
As these CEO packages get renegotiated all the time, each company feels the need to one-up the competitors (demonstrating to everyone that their own CEO is better than those competitors, and is therefore paid higher). This vicious cycle never ends, and CEO pay continues to grow significantly faster than profits (or workers’ pay).
Couldn’t agree more. Average CEO pay is absurd, especially when you consider that many of them aren’t even doing a good job…and yet rake in ten million or more PER YEAR.
Think about that. Most people would consider half that amount, or even a quarter or an eighth, to be a great amount to have at retirement.
These people just all it “my salary,” and when things get tough, do the CEOs (who often ran the company poorly), take a pay cut to reflect their own poor performance?
Of course not!! It’s layoff time for the worker bees and time for a new yacht for the CEO!!
Read headline; thought Tim Cook stole $65 million dollars.
It’s a bit weird that the author notes that “investors are getting a better return on each dollar”. Seems to imply that if you invested more in Tim, they would see even more profit, which I don’t think is the case. Nevertheless, it’s good to see that whilst he is rewarded handsomely for his efforts, it isn’t completely out of whack with respect to others. (Of course, we could debate whether it’s out of whack with respect to society)
Why would it imply that?
Return = Growth / Investment. Increasing investment never increases return if growth stays the same. Nobody implies paying Tim more would increase growth.
I think it too early to say if he is worth it as momentum is a big part of Apple’s current state.
Tim is the Apple CEO, he Is in charge of momentum. Troll elsewhere.
After initial introduction of the iPhone (2007), at the time when RIM was the king, Blackberry continued to grow their profits for the next four years (which didn’t manage to conceal the fact that its market share, as well as stock price, started shrinking immediately). RIM’s peak year was 2011 (the year of the iPhone 4S).
It has been almost five years since Steve Jobs’s death, and over six years since Cook has been de-facto CEO. I don’t think anyone can foresee Apple’s imminent (or even long-term) decline yet, especially since no other product is on the horison that could encroach on Apple’s dominance in the field. In other words, compared to RIM, when a watershed event happened (for RIM, emegrence of iPhone, for Apple, death of Steve Jobs), Apple’s CEO is infinitely more competent and capable today than RIM’s duo (Balsillie-Lazarides) was at the time.
I have used RIM as an example, but we could use any other major company that went through similar watershed event that was a potential major setback, and for many, the setback would deliver consequences within just a few years at most, and more often rather immediately. No such misfortune for Apple; though. Must have something to do with senior management…
the biggest most annoying troll of them all telling others not to post! ….classic
2011 was a long time ago. The last Apple product release Steve Jobs saw was iPhone 4S. Apple has been doing anything but coasting.
no human being actually earns $65 million per year. Show me one, and I will show you someone who would perform just as well for no more than $10 million per year in compensation. Executive pay has no basis in reality.
If you agree that Apple stood for greatness and wow products, Tim has failed completely. Nor are the profits due Tim leadership. The new products may sell well, but that’s just temporary suppressed demand which will die in a few years because there is nothing truly creative coming out of Apple. Riding the momentum and coming up with “more of the same” to make profits is hardly deserving of high pay. If there is anyone deserving for high pay it would be the product team. Sadly they aren’t at the exceptional level that Jobs pushed them to. The company will soon decline in to mediocrity — another 5 years — and we will see cases at Harvard Business School about what went wrong. Watch and weep as the icon of greatness becomes just one more average, bland corporation. Need proof? The iPhone 6 and most other “improved” products.
No one is worth $65 million, but this is what happens when the government gets involved and capped CEO pay. They just found out other ways to give compensation and the government invented run away compensation at stock holders expense.