Apple CEO Tim Cook will become a free agent at the end of next year
Bloomberg recently released a list of the top paid CEOs for last year and it revealed that Apple CEO Tim Cook received more than $133 million in compensation last year. This includes $3 million in salary, a $7.7 million bonus, $122.2 million in stock awards, and more than $884 million in perks. The total placed Cook second among these well-paid executives. Topping the list with total 2019 compensation amounting to $595.3 million was Tesla CEO Elon Musk.
Tim Cook was the second best paid executive in the world last year
Other executives guiding companies involved in smartphones, tablets, smartwatches and the like include the CEO of Google parent Alphabet, Sundar Pichai. The latter finished eighth after taking home $86.2 million in 2019. His $650,000 annual salary was greatly padded with $82.2 million in stock awards and $3.4 million in perks. We might have to hold a bake sale for Microsoft CEO Satya Nadella. The executive last year received only $77.3 million in total pay which made him the ninth-highest compensated executive in the U.S. last year. His salary of $2.3 million was enhanced by a $10.8 million bonus, $64 million in equity awards, and perks totaling $111,400.
Our headline from August 26th, 2011 announcing Tim Cook's 10-year contract
Sarah Anderson, the director of the Global Economy Project at the Institute for Policy Studies, said, "While excessive compensation might be most dangerous at Wall Street firms because of the systemic risk, sky-high pay throughout corporate America encourages many types of socially and environmentally damaging behavior. And in many sectors, like tech, I think it has largely gotten a pass."
Some of the stock awards were granted to these executives years ago and are now vesting. Part of the $122.2 million in stock awards that Apple's Cook received last year was related to a huge grant of one million shares that he received in 2011. That was part of a package offered to the CEO shortly after he replaced Steve Jobs for the second and final time at Apple. The first time, in 2009, Jobs was taking a leave of action. He returned a few months later only to step down for good in August 2011. The company's board of directors needed to show stability in the wake of Jobs' resignation so they awarded Cook the stock which was valued at $383 million at the time. Less than two months later, one of Apple's founders was dead.
Other Apple executives taking home big bucks last year include Senior Vice President and Chief Financial Officer Luca Maestri ($25.2 million including stock award), Senior Vice President, General Counsel and Secretary Kate Adams ($25.2 million including stock award), Senior Vice President-Retail Deirdre O'Brien ($19.2 million including stock award), Chief Operating Officer Jeff Williams ($25.2 million including stock award) and former Senior Vice President-Retail Angela Ahrendts ($22.3 million including stock award). The latter left Apple earlier in the year.
Four of the highest-paid CEOs last year were in the tech industry; the one that we didn't previously mention was Intel CEO Robert Swan whose total compensation of $99 million placed him seventh on the list.
Apple's shares have risen more than six-fold since Tim Cook permanently replaced Steve Jobs as Apple CEO
Apple's board feels that it can justify these huge checks because much of the pay is based on how well the stock has done. And with Apple's shares closing the week at an all-time high, its executives are being rewarded for making investors wealthier.
Cook's contract with Apple expires after 2021. As CEO, Cook oversaw changes to the iPhone including larger screen sizes, the use of OLED panels, the redesign bringing Face ID and the notch to the device, and more. He also was running the company when hugely popular products like the Apple Watch and AirPods were launched. There is no reason not to expect Cook to remain at Apple for another ten years. He will be running the show as the company introduces its next big thing, Apple Glass. We could see the AR wearable unwrapped in 2022 or 2023.
During normal times, we'd expect a new contract for Cook to include more incentives including larger stock awards. But in this day and age when executive pay is scrutinized more than ever, it will be interesting to see what kind of deal Apple and its CEO agree to.
Things that are NOT allowed: