Apple CEO takes 99 percent pay cut

Apple CEO takes 99 percent pay cut

Cupertino : CA : USA | Dec 28, 2012 at 1:24 PM PST
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Apple's CEO Tim Cook presents the new iPhone 5

The bad news for Apple CEO Tim Cook is that he took a 99 percent pay cut in 2012. In his first full year as CEO, Mr. Cook made Apple, Inc. the most valuable company of all time -- yet still took an incredibly drastic pay cut in his compensation package.

The good news for Apple CEO Tim Cook is that he made nearly half a billion dollars in stock and compensation in 2011, so he is probably not terribly concerned about his 2012 base salary.

Year-end documents have been filed with the Securities and Exchange Commission showing that the Apple CEO took a 99 percent pay cut in 2012 compared to his 2011 compensation. Mr. Cook made "only" $4.2 million in 2012 -- a combination of his $1.4 million base salary, a $2.8 million bonus, and a measly $17,000 contribution to his 401(k).

In 2011, Mr. Cook's compensation was valued at nearly $400 million, bolstered by a grant of a million shares of the incredibly valuable Apple stock. Apple stock is currently trading at more than $500 per share -- up 27 percent for the year -- so a million of those represent a serious chunk of change.

Do you think Tim Cook is worried about this decline in his pay? I'm guessing he's not. Mr. Cook declined a $75 million payout earlier this year. He was the highest-paid CEO in America in 2011.

Mr. Cook was actually paid a far lower compensation package this year than many of the people who report to him as employees. Apple's SVP of technologies Bob Mansfield was paid out $85.5 million in 2012. Apple's supply chain manager made nearly $70 million. Apple's top lawyer Bruce Sewell made $69 million in 2012 -- a 700 percent raise over his 2011 compensation. Then again, Mr. Sewell won a pretty big case this year.

On one hand, yes -- Mr. Cook made 99 percent less overall than he did last year. Technically, though, his base salary increased dramatically. Last year, his base salary was $900,000. In 2012, Mr. Cook's base salary jumped up to $1.4 million. The point here is that Apple compensates its top-level employees primarily in stock options, not in salary -- accounting for wild swings in annual compensation plans.

In the Tim Cook era at Apple, this is what you might call Cooking the books.

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Apple CEO Tim Cook speaks during an Apple special event
Apple CEO Tim Cook speaks during an Apple special event
Joe Kukura is based in San Francisco, California, United States of America, and is an Anchor on Allvoices.
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