Date: Tuesday, December 31st, 2013, 08:43
Category: Apple, Business, Finance, News
I remember the days of Gil Amelio (sorry to single you out Gil) and other CEOs of Apple who basically ‘took the money and ran’. In those days, the “golden parachute” was the norm for essentially kicking out CEOs who weren’t helping the company. Definitely a weird practice. Then Steve Jobs came back and famously paid himself a salary of $1.00 per year…yes, 1000 pennies. Of course he received a truckload of stocks which paid off more than a salary would have, and was also good PR. Now it appears that Tim Cook may be taking a page from Steve’s handbook by sacrificing some of his profits as a result of poor Apple stock performance in 2013. According to Apple, Tim Cook wanted to “…set a leadership example in the area of CEO compensation and governance.”.
So what exactly dis he do? According to CNNMoney, Cook offered up 50% of his stock holdings against the performance of Apple stock.
“Apple said its compensation committee didn’t want to place too heavy a burden on Cook. The committee only wanted less than half of Cook’s annual stock grants to be subject to the new performance-based metric. At Cook’s urging, however, the committee placed half of his stock grants at risk.”
Apple’s shares reportedly performed so poorly last year that Cook lost the entire 50% that was at risk. Apple’s stock fell 26% between August 2012 and August 2013. That stock was worth nearly $4 million. No need to feel too badly for the Apple CEO, he collected $1.4 million in salary, a $2.8 million cash bonus and another $36.4 million in stock grants. The $4 million pay cut ended up representing only 10% of his overall compensation last year. Currently, Apple stocks are doing quite well, according to analysts, so Cook probably won’t have to sacrifice any shares for the next period, which vests in August 2014. Good thing since according to CNNMoney, those shares will be worth $22.4 million at today’s value. Man I wish I had invested in Apple stock in the 90’s.