Apple CEO Tim Cook Docks Himself $4 Million In Pay
Apple’s stock has notoriously underperformed this year, despite the massive success of the company. But Apple CEO Tim Cook isn’t taking the matter lightly; he recently urged the company’s board of directors to penalize him more than they initially suggested, resulting in a penalty of $4 million dollars from his stock options. The move could be an olive branch to angry activist investors, but according to Cook, it is also to set a wider example in the corporate world.
CNN reports that earlier this year, Apple tied its executive compensation to the company’s stock performance- specifically, in comparison to the S&P 500. And for most of the year, Apple stock underperformed the indicator.
Cook urged the relevant corporate committee to place half his stock grants “at risk,” and Cook will now lose that full 50%, totaling about $4 million.
“Apple’s stock fell 26% between August 2012 and August 2013 (Cook’s stocks vest each August), but the S&P 500 rose 18% during that same period,” the article noted.
Stock price is just one indicator of a company’s fiscal health.
Since succeeding Steve Jobs as CEO in 2011, Cook as struggled with investors and a sense that Apple lost innovation and forward momentum. But stock price is just one indicator of a company’s fiscal health. In September of this year, Apple surpassed Coca-Cola as “the world’s most valuable brand.”
But Cook said he had more than just Apple in mind when he made this decision.
In a legal filing, the company said Cook had a “strong desire to set a leadership example in the area of CEO compensation and governance.”
Cook may have been alluding to exorbitant executive compensation even at failing companies, which continues to make headlines and provoke populist ire five years after the economic meltdown of 2008.
But the New Year won’t be too sad for Cook: he’s still taking home over $40 million.