By all accounts, 2019 was a pretty spectacular year for Apple, its customers and investors. The stock rose 89% during the 12 months and Apple made some changes to the iPhone that its fans were hoping to see. The camera was taken to another level with Night Mode, the addition of an ultra-wide lens, the use of computational photography with Deep Fusion and the introduction of Slowfies (a slow-motion selfie video). Apple also made the new models sturdier and enhanced the phones' water resistance. And battery life, once Apple's Achilles heel, is now one of the iPhone's strong suits.
was finally taken out to a backlot in Cupertino and shot last March. There was plenty of egg on Apple executives' faces that day. But overall, Apple executives did a good job guiding the company through the 12 months and you might have expected to hear that CEO Tim Cook banked a higher bonus. But according to SEC filings (via CNBC), Cook's total pay for 2019 declined 8% from the prior year's figure.Everything wasn't biscuits and gravy for Apple last year. The company's longest-running piece of vaporware, the AirPower wireless charger,
Apple failed to exceed certain targets by the same amount it did in 2018
At $3 million, the CEO's base salary remained the same from 2018. But the difference in pay year-over-year came from a reduction in the target payout executives received. As Apple stated in the SEC filing, "In 2019, Apple’s performance exceeded the target performance goals for both net sales and operating income, resulting in a total payout of 128% of the target payout opportunity for each named executive officer." That was down from the 200% of the target payout that Apple executives received in 2018 and simply indicates that the company failed to exceed its financial targets last year by as much as it did the previous year. The targets for 2019 were $256.6 billion in net sales and $60.1 billion in operating income. The targets are based on various factors including the global economy, foreign exchange trends and trade conditions.
As a result of the lower target payout, Cook's bonus dropped to $7.67 million last year from $12 million the year before. The document filed with the SEC by Apple also notes that the company covered the $457,083 it cost for the executive's personal security services and another $315,311 in air travel that Apple paid. Also, a contribution of $16,800 was made by Apple to Cook's 401(k) retirement plan.
Cook's non-equity compensation came to $11.56 million compared to the previous year's $15.7 million. But that is all a drop in the bucket compared to the $113.5 million in Apple stock that vested for Cook in 2019. Adding up the executive's salary, bonus and vesting shares, Apple's CEO took in over $125 million last year. That figure was down from the $136 million he pocketed in 2018. By one computation, since becoming CEO in 2011 following the death of Steve Jobs, Cook has banked $963.5 million.
Three Apple executives were awarded lower bonuses last year because of the lower target payout. Chief financial officer Luca Maestri, chief operating officer Jeff Williams and general counsel Kate Adam had their non-equity bonuses reduced from $4 million to $2.6 million for 2019. However, all three received total pay of approximately $25.2 million last year.
Compare the pay received by these executives (including Tim Cook) to the median compensation received by an Apple employee last year of $57,596. That was up from the $55,426 median compensation received last year by those working for the company. Based on Tim Cook's non-equity compensation, the CEO made 201 times the amount of the 2019 median paycheck at Apple.