Apple CEO Tim Cook’s cash bonus rose 40% last year to $10.7 million, Apple said Tuesday in its annual proxy filing with the Securities and Exchange Commission. Cook also received a $3 million salary, $470,246 in security costs, and $432,564 for air travel. All in all, Cook’s 2020 pay, excluding vested shares, totaled $14.8 million.
In addition to his compensation, Mr. Cook had a total of $281.9 million in restricted stock that vested during the year. Those shares were a core part of Mr. Cook’s long-term incentive package that was awarded in 2011 when he became CEO. The decade-long plan’s final tranche vests later this year.
In September, Apple’s board awarded a new long-term equity plan to Mr. Cook with shares that vest from 2023 through 2025, giving him incentive to stay on as CEO through that period. Mr. Cook, 60 years old, joined Apple in 1998.
MacDailyNews Take: $296.7 million/year is $810,656/day, $33,777/hour (every hour of the day and night, not just work hours), $563/minute (every minute), and $9.38/second (every second). In the time it took most of you to read this post to the bottom, Tim Cook received over $2,250.00 in compensation.
CEO compensation, along with that of most of upper management, is obviously out of whack, not just for Tim Cook and Apple, but in general. However, in order to retain quality people, companies have to compete on the field of play as it is. What to do?
It’s easy to understand why critics focus on the gaudy awards of cash and stock that executives take home. And, yes, it’s hard to deny that some bosses get paid a lot more than they deserve. But the structure of compensation is ultimately a lot more important than its level, because it gets to the heart of how managers run companies and create value for shareholders…
There are creative ways — yet simple and easy to implement — to tie executives’ fortunes to the long-term health of their companies. Tying bosses’ pay to the levels of debt at the business, for instance, will dissuade them from taking risks that might alienate creditors. Preventing executives from selling company stock until several years after it’s granted will give them a powerful incentive to think long term. And updating the compensation package to reflect changing conditions in the market and the company will ensure that managers’ interests are always aligned with those of the company and its shareholders.