Apple CEO’s massive pay cut

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REUTERS

Apple CEO Tim Cook

New York - Apple CEO Tim Cook's 2012 compensation package of $4.17-million is a huge cut on paper for the top executive of the most valuable US corporation, after a 2011 package fattened by more than $376 million in long-term stock awards.

Cook received the largest single pay package awarded to a company CEO in about a decade when he replaced Apple co-founder Steve Jobs in August last year, shortly before the Silicon Valley legend's death in October 2011.

The maker of the iPhone and iPad made the 2012 compensation disclosures in a regulatory filing on Thursday. Cook, 52, has been with Apple since 1998.

Virtually all of Cook's $376 million stock bonus in 2011 was in awards that vest in two chunks - one in 2016 and the other in 2021. This structure was intended to keep Jobs' longtime lieutenant at the helm for many years, as the value of the stock will depend on how well the company is doing in 2016 and 2021.

Cook, who is credited with masterminding a sprawling but efficient Asian supply chain, has generally received high marks for his first year for shepherding several successful gadget launches, including the iPhone 5.

But he was forced to make a public apology in September after the company launched a mapping service application riddled with glaring geographical errors. The Maps app fiasco contributed to the departure of fellow Apple veteran and software chief Scott Forstall.

In addition, some analysts questioned whether Cook, whose only major new product since taking the helm was a smaller version of the iPad that Jobs propelled into the mainstream in 2010, has the vision to produce the next big product category and sustain historically stellar growth for Apple as global mobile competition intensifies.

“The jury is still out in terms of the job he is doing,” said fund manager Tim Ghriskey, whose Solaris Group counts Apple stock as the biggest holding among the approximately $2-billion it manages.

But he added that the company's long-term prospects look strong, particularly if it rolls out oft-rumoured television products in the next few years.

Cook's latest compensation package also pales in comparison to his package in 2010, when he was chief operating officer. That package was 14 times higher.

A company spokesman would not comment beyond the filing.

Jobs famously received $1 a year in salary in the three years before he stepped down, though in 2000 he too received a stock option that analysts say was valued at almost $600 million at the time.

Looking beyond Apple, Yahoo's CEO, Marissa Mayer, a former Google high-flyer hired this year to try to turn around the struggling Internet icon, won a pay package worth more than $70-million. Despite her lack of a track record as CEO and Yahoo's tiny size in comparison, her basic pay is comparable to Cook's, with about $1 million in annual salary and up to $2-million in an annual bonus.

Oracle’s Larry Ellison, one of the most highly paid US chief executives - and also the world's sixth-richest man, according to Forbes - received total compensation for the year ended May 31, 2012, of $96.2-million - almost all of it in stock options. That compared with $77.6-million in 2011.

According to a study of the Fortune 500 conducted by Forbes this year, CEOs were paid a base salary of $1.1-million in 2011 on average, with the mean annual bonus at $2.4-million and average total compensation - including stock awards - at around $17-million. - Reuters

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