Apple raises CEO's pay after earnings rebound

US$102m: Apple chief executive officer Tim Cook's total payout for the year.
US$102m: Apple chief executive officer Tim Cook's total payout for the year.

Tim Cook's gets 74% increase in bonus as company shares return 39% in fiscal 2017

NEW YORK • Apple chief executive officer Tim Cook received a 74 per cent increase in his annual bonus for fiscal 2017 as the iPhone maker posted higher revenue and net income, after a rare decline a year earlier.

Mr Cook's incentive pay totalled US$9.33 million (S$12.5 million) for the year ended Sept 30, the Cupertino, California-based firm said on Wednesday in a regulatory filing.

He also took home US$3.06 million in salary and a previously disclosed equity award of US$89.2 million, bringing his total payout for the year to about US$102 million.

His top five lieutenants each got bonuses of US$3.11 million, bringing their total compensation to about US$24.2 million each, including salaries and stock awards.

The equity compensation is composed of shares that vest solely based on the executives' continued employment and others tied to the performance of Apple's stock, compared with other S&P 500 companies.

Apple has increased the proportion of performance shares in its equity awards, which boosts potential future earnings for the executives if the company outperforms its S&P 500 peers. History suggests that could be a good deal for them.

In 2014, executives including Mr Dan Riccio, chief of hardware engineering, and former general counsel Bruce Sewell received performance awards that paid out three years later at almost twice as many target shares as planned after Apple's stock returned 69 per cent over that span, including reinvested dividends.

In August, Mr Cook collected 560,000 shares when part of his 2011 mega-award vested because Apple outshone more than two-thirds of the S&P 500 over three years.

For the first time, he ran up a US$93,109 bill for travelling on private aircraft on non-business-related trips.

The Apple board stipulated this year that for security reasons, the chief executive should use private planes for business and personal travel, citing the risk given his high profile. Personal security costs were calculated at US$224,216.

Apple shares returned 39 per cent in fiscal 2017, more than double that of the S&P 500.

Last month, shortly after the start of the current fiscal year, the company released iPhone X, a long-awaited upgrade to its flagship product. Analysts said they expect the new handset to help accelerate revenue growth.

Cash bonuses for the executives paid out above their target as the company beat net sales and operating income goals.

Absent from Apple's filing are details about what the company paid chief design officer Jony Ive, considered by some to be its most important employee.

This month, he resumed direct management of product design teams after working on the new Apple Park headquarters for the past two years.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 29, 2017, with the headline 'Apple raises CEO's pay after earnings rebound'. Print Edition | Subscribe