Apple gives CEO $376m of stock as ‘retention tool’
A review of a securities filing shows Cook’s pay package was valued at $378 million (€295m). The vast majority came in a grant of a million restricted stock units worth $376m at the time. Half of the stock units will be paid in August 2016, with the rest paid in August 2021.
His salary and perform-ance bonus, about $900,000 each, made up much of the rest. He also made $16,520 from company contributions to a $401,000 retirement account and company-paid life insurance premiums.
In comparison, Jobs accepted a $1 annual salary for years and owned about 5.5 million shares, worth about $2.3 billion today.
In total, Cook has about 1.36 million restricted shares and 13,754 regular shares worth a combined $580m, the filing showed.
Apple said Cook’s award was a retention and promotion tool, as well as recognition for running the company during Jobs’s previous medical leaves of absence.
“The board views his retention as CEO as critical to the company’s success and smooth leadership transition. The award is intended as a long-term retention incentive,” Apple said in its statement.
Apple said its compensation goal is to encourage long-term results above short-term risk-taking, and the 51-year-old former chief operating officer will not begin to reap the actual benefits of the stock award for another four years.
But Securities and Exchange Commission rules compel companies to book a share grant’s value in the year it is granted, making Cook’s pay package unlikely to be beat.
Cook’s share grant was already known last year. The filing disclosed that Apple also decided in November to raise his base annual salary to $1.4m and double the bonus target for paid executives to 100% of their annual salary.
Cook’s award is well above that given to Philippe Dauman, the Viacom chief executive who led the top-paid chiefs executive of 2010 with an $84.5m haul based on a new contract that granted him shares and stock options.
Cook’s pay package was also valued at more than all of the next nine highest paid chiefs executive of 2010 combined, or about $356m.
Apple said it raised the bonus target to keep its executive pay more in line with that of other technology and entertainment peers such as Google and Walt Disney.
“As far as a singular award, we haven’t seen anything this large in a long time,” said Aaron Boyd, head of research at Equilar, an executive compensation data firm.
The only one-time stock award in recent memory that was worth more, said Boyd, was the January 2000 stock option package that Apple gave Jobs. The 40 million options in that award were valued at more than $600m at the time.
Jobs, ousted from Apple in the mid-1980s, returned to the company in 1997 and went on to transform Apple into the world’s most valuable technology company with a string of hit products including the iPod, the iPhone and the iPad.
