Apple’s 2013 performance relative to the S&P 500 costs Tim Cook $4M in stock

But the CEO still has nearly $40M in stock and made 2% more overall than in 2012.

Read the whole story

 

[dumbducky]

How do I get one these jobs?

 

[chris0101]

I'm not a fan of Apple, but when you consider the fact that there have been cases of companies who have been ran into the ground by their poor leadership and then those leaders (well managers since they don't deserve the to be called a "leader) walking away with generous "bonuses" or getting to keep their jobs with "retention bonuses" this is reasonable by comparison. Still excessive though, but more reasonable than some of the most appalling cases.

To be honest though, I think the entire executive compensation system is broken. Stock options have not led to the advantages that their advocates thought they would. Instead we have have a system where managers have the incentive to sacrifice long term viability of a company in favor of short term profits.

That and compensation is excessive. I'm of the opinion that executive compensation should not exceed 40 to 50 times that of the lowest paid worker in a company including every bonus, perk, etc.

 

[Smack]

Apple also paid out $11.80 per share in dividend in 2013, so his 72,877 shares netted him another $860,000. The dividend would have been very nice if he stuck with the shares he was originally granted.

 

[Eldorito]

Base salary of $800k for executives is actually incredibly low, but at the same time in early 2012 these people sold hundreds of thousands of shares and took away tens of millions. It's a great strategy that Apple has, these people have become incredibly wealthy via building the value of the company rather than the usual CEO path of tens of millions in payouts when they're fired.

 

[Boskone]

dumbducky[/url]":ktwldh6g]How do I get one these jobs?

You have to be a psychopath, narcissistic, and probably more than a little dishonest.

Maybe it's just the fact that I'm catching up on the Star Wars comics, but corporate governance has striking similarities to the Sith. As long as you can get away with it, anything goes for power/money; subordinates exist to be scapegoated and destroyed at will; and so forth.

 

[TedKord]

And Elop got $25 million.

 

[lotharamious]

As much as this personally makes me upset since I make WAY less than this:

The rich get richer.
The poor get poorer.

What else is new?

 

[arcadium]

I think there is a fundamental problem with tying executive compensation with stock prices. While, over the long run stock prices will accurately reflect the value of a public company, there can be massive distortions in the short run. Tying executive compensation to short term (1 year is way too short....5 years may be closer to a better number but still may not be enough) incentivizes execs to make short term decisions. Even worse, it makes them make cosmetic decisions which aren't good for te company but sound good to traders.

Steve Jobs was immune to those pressures because of who he was. I really admire Bezos (although I am not an Amazon fan) for being able to insulate his company from those pressures. Google is still run by its founders so they aren't concerned about the stock price. I am worried about MSFT because the next CEO will be very pressured by the stock market

It's gonna e an interesting few years in tech.

 

[Lonyo]

Smack[/url]":uzecphfx]Apple also paid out $11.80 per share in dividend in 2013, so his 72,877 shares netted him another $860,000. The dividend would have been very nice if he stuck with the shares he was originally granted.

He didn't get anything from the options.
They are options to buy stock at a discount or get it free when the vesting period expires. He doesn't own them until they vest, and hence he didn't get any dividend from them.

 

[btb]

beebee[/url]":1o3i0rrw]
Except the CEO has approved borrowing money to buy back stock, boosting the stock price. Hence the CEO can play games with OPM (other people's money) to make money for himself.
Apple is a house of cards.

I really don't think it's the CEO that take this decisions, especially in a public company.

 

[btb]

Boskone[/url]":3tycgo8b]
You have to be a psychopath, narcissistic, and probably more than a little dishonest.

Or, maybe, you have to be very very talented at your job.

 

[cecilroytoo]

Does anyone know what parentage tax Cook pays on his riches? I hope he's making a decent contribution to society.

 

[tigerhawkvok]

Cool, their bonus was, as a proportion of salary, more than 72,000x greater than mine (and a bit more than 45,000x bigger literally). And I got one of the bigger bonuses at work o_0.

How can anyone think it's OK to give a bonus equal to 50 average people's yearly salary?

 

[vortigern_red]

"Those executives include CFO Peter Oppenheimer, Chief of Operations Jeffrey Williams, Daniel Riccio (hardware engineering lead), and Eddie Cue (head of online efforts)."

Got to love Eddie's job title! I wonder if I could get my job title changed to "Developer who makes an effort", no expectation of success

 

[Abhi Beckert]

Perhaps a more sensible dollar figure would be how much would the stock have been worth if Apple had performed as required for Cook to have received it?

 

[Abhi Beckert]

dumbducky[/url]":1vv3mlo3]How do I get one these jobs?

Found your own business, make a ton of money. Spend that founding another business which also makes a ton of money, then do it a third time, and a fourth time.

After that, you'll have proven you have what it takes and can apply for a job as an executive at a major corporation.

Easier said than done, since most new businesses either don't make much money or go bankrupt.

 

[Abhi Beckert]

chris0101[/url]":3rzvwr0k]That and compensation is excessive. I'm of the opinion that executive compensation should not exceed 40 to 50 times that of the lowest paid worker in a company including every bonus, perk, etc.

You have to pay your executives at least as much as they could earn working for your competitors, otherwise all the best executives will work for the competition, and you'll be crushed.

 

[amckenz215]

You can say what you want about Apple management, but they are leaps and bounds ahead of the other tech firms in sales and technology. So, why shouldn't their upper management reap the rewards? I would call it jealousy!

 

[ws3]

beebee[/url]":3ic2420b]

robrob[/url]":3ic2420b]Base salary of $800k for executives is actually incredibly low, but at the same time in early 2012 these people sold hundreds of thousands of shares and took away tens of millions. It's a great strategy that Apple has, these people have become incredibly wealthy via building the value of the company rather than the usual CEO path of tens of millions in payouts when they're fired.

Except the CEO has approved borrowing money to buy back stock, boosting the stock price. Hence the CEO can play games with OPM (other people's money) to make money for himself.

Come on now, it's not as if Apple can't actually afford the stock buybacks and dividends. Even despite the recent buybacks and dividends, Apple's total cash and cash equivalents keeps increasing.

Borrowing the money makes sense because A) interest rates are so low it's basically free money and B) Apple avoids repatriating overseas cash and incurring a tax.

Really, I understand you're upset about your paymaster circling the toilet, mostly due to Apple, but your recent Apple-hating posts have degenerated into incoherent gibberish. Get a hold of yourself, there will be other companies for you to love after Blackberry dies.

 

[Ledgem]

Boskone[/url]":3459ah48]

dumbducky[/url]":3459ah48]How do I get one these jobs?

You have to be a psychopath, narcissistic, and probably more than a little dishonest.

Maybe it's just the fact that I'm catching up on the Star Wars comics, but corporate governance has striking similarities to the Sith. As long as you can get away with it, anything goes for power/money; subordinates exist to be scapegoated and destroyed at will; and so forth.

I’m guessing that people will interpret your comment as hating on the successful, but this reminds me of something interesting that I heard in a psychology class. Supposedly there was a study of some sort where they catalogued traits of people across society. A fascinating connection was made: CEOs and crime bosses had a lot of shared traits. The explanation was that environment counted for a lot; the behaviors and traits that CEOs exhibited, under that environment, were accepted and led to successes, whereas it was looked down upon when dealing with “shadier business.”

I wouldn’t classify myself as someone who blindly dislikes CEOs, but I found it to be an interesting bit of information.

 

[KarolofNine]

No person is worth $4.25 M per year, no matter how magical the annual product update he oversees the release of.

 

[ewelch]

Did they factor in how much Apple's price was effected by manipulation of the market by hedge fund managers who artificially manipulated Apple's stock so it would hit $500 mid-January 2103? They stood to make massive profits on the drop of Apple's stock to that level at that time. Mission accomplished.

 

[spindizzy]

Abhi Beckert[/url]":ixx70ync]

chris0101[/url]":ixx70ync]That and compensation is excessive. I'm of the opinion that executive compensation should not exceed 40 to 50 times that of the lowest paid worker in a company including every bonus, perk, etc.

You have to pay your executives at least as much as they could earn working for your competitors, otherwise all the best executives will work for the competition, and you'll be crushed.

Except of course there's never been any proof, or even strong evidence linking executive remuneration and actual skill, performance and execution.

It's just that they get to determine their own pay through the use of a rigged system of remuneration committees.

The evidence actually showed that they performed more effectively when their pay rates were orders of magnitude lower than they are now.

 

[Netguru]

chris0101[/url]":1ahyh20d]I'm not a fan of Apple, but when you consider the fact that there have been cases of companies who have been ran into the ground by their poor leadership and then those leaders (well managers since they don't deserve the to be called a "leader) walking away with generous "bonuses" or getting to keep their jobs with "retention bonuses" this is reasonable by comparison. Still excessive though, but more reasonable than some of the most appalling cases.

To be honest though, I think the entire executive compensation system is broken. Stock options have not led to the advantages that their advocates thought they would. Instead we have have a system where managers have the incentive to sacrifice long term viability of a company in favor of short term profits.

That and compensation is excessive. I'm of the opinion that executive compensation should not exceed 40 to 50 times that of the lowest paid worker in a company including every bonus, perk, etc.

In japan, the companies (CEO's and their ilk), can't make more than 30 times that of the lowest paid employee. I know some of you will say this is B.S. because it's socialism. Well, Japan is as far from socialism as Bush was to being smart. There is no one person anywhere in this world that is worth millions per year. Especially those that make their money off of other people hard earned money. All you Na-Sayers out there, please tell me who is worth so much money as to hurt the public just so they can buy there next million dollar car. Of course the person that invents a method to cure cancer, should make enough money as to never have to worry about making their house payment.

 

[Bearologist]

Boskone[/url]":152vc6e2]

dumbducky[/url]":152vc6e2]How do I get one these jobs?

You have to be a psychopath, narcissistic, and probably more than a little dishonest.

Maybe it's just the fact that I'm catching up on the Star Wars comics, but corporate governance has striking similarities to the Sith. As long as you can get away with it, anything goes for power/money; subordinates exist to be scapegoated and destroyed at will; and so forth.

Please don't insult the Sith like that.

 

[beebee]

You people are soooo out of the loop. Jobs did two scams. One was backdating stock. The other was making false statements about his health to keep the stock price up.

http://www.nbcnews.com/id/16373057/

http://www.bloomberg.com/apps/news?pid= ... TeJr..Zsx4

Jobs scams make Cook look like a noob.

 

[Grieviant]

Those executives include CFO Peter Oppenheimer, Chief of Operations Jeffrey Williams, Daniel Riccio (hardware engineering lead), and Eddie Cue (head of online efforts).

Spearhead ebook price fixing scheme that pilfers millions and gets company convicted by DOJ = pay raise well earned, apparently.

 

[.劉煒]

Not an Apple fan, but I'm pretty sure his compensation seems adequate.

 

[beebee]

"Unlike ISOs, nonqualified stock options can be granted at a discount to the stock's market value. They also are transferable to children and charity, provided your employer permits it."

http://money.cnn.com/magazines/moneymag ... /lesson10/

I'd be shocked if most Ars readers aren't getting options, but figured I provide the link showing they are discounted. In fact the discount is considered deferred income now. So don't weep for CEOs with options on poorly performing stock.

I'm not sure about the current laws, but in the past, you can trade in your underwater options for new options at a lower price IF you reset the clock. I think those can't be discounted.

 

[.劉煒]

I'd be shocked if most Ars readers aren't getting options,

The federal government offers discounted employee shares? I'd love to buy in.

 

[AdamM]

lotharamious[/url]":1dihdh72]As much as this personally makes me upset since I make WAY less than this:

The rich get richer.
The poor get poorer.

What else is new?

So how did Apple rob the poor to give to Tim Cook exactly?

It isn't a fixed pie.

Someone having billions of dollars doesn't make me any poorer.

beebee[/url]":1dihdh72]

ws3[/url]":1dihdh72]

beebee[/url]":1dihdh72]

robrob[/url]":1dihdh72]Base salary of $800k for executives is actually incredibly low, but at the same time in early 2012 these people sold hundreds of thousands of shares and took away tens of millions. It's a great strategy that Apple has, these people have become incredibly wealthy via building the value of the company rather than the usual CEO path of tens of millions in payouts when they're fired.

Except the CEO has approved borrowing money to buy back stock, boosting the stock price. Hence the CEO can play games with OPM (other people's money) to make money for himself.

Come on now, it's not as if Apple can't actually afford the stock buybacks and dividends. Even despite the recent buybacks and dividends, Apple's total cash and cash equivalents keeps increasing.

Borrowing the money makes sense because A) interest rates are so low it's basically free money and B) Apple avoids repatriating overseas cash and incurring a tax.

Really, I understand you're upset about your paymaster circling the toilet, mostly due to Apple, but your recent Apple-hating posts have degenerated into incoherent gibberish. Get a hold of yourself, there will be other companies for you to love after Blackberry dies.

You buy back stock when you are out of product ideas. Case closed.

Get a grip, it is over for Apple. I'm watching diehards go Android that I never thought would switch. Some still have Mac books, but are running windows 7 on them.

The flock can still be sheared for a while, but the growth is gone. Those cheap Google Nexus phones and no-contract service plans will doom all the competition.

No you buy back stock when you have more cash than you could possibly know what to do with. Unless Apple is looking to buy Exxon or Microsoft there is really no reason for them to be hoarding so much without giving it back to the shareholders.

 

[jrose]

AdamM[/url]":2yxx1fp1]

lotharamious[/url]":2yxx1fp1]As much as this personally makes me upset since I make WAY less than this:

The rich get richer.
The poor get poorer.

What else is new?

So how did Apple rob the poor to give to Steve Jobs exactly?

It isn't a fixed pie.

Someone having billions of dollars doesn't make me any poorer.

beebee[/url]":2yxx1fp1]

ws3[/url]":2yxx1fp1]

beebee[/url]":2yxx1fp1]

robrob[/url]":2yxx1fp1]Base salary of $800k for executives is actually incredibly low, but at the same time in early 2012 these people sold hundreds of thousands of shares and took away tens of millions. It's a great strategy that Apple has, these people have become incredibly wealthy via building the value of the company rather than the usual CEO path of tens of millions in payouts when they're fired.

Except the CEO has approved borrowing money to buy back stock, boosting the stock price. Hence the CEO can play games with OPM (other people's money) to make money for himself.

Come on now, it's not as if Apple can't actually afford the stock buybacks and dividends. Even despite the recent buybacks and dividends, Apple's total cash and cash equivalents keeps increasing.

Borrowing the money makes sense because A) interest rates are so low it's basically free money and B) Apple avoids repatriating overseas cash and incurring a tax.

Really, I understand you're upset about your paymaster circling the toilet, mostly due to Apple, but your recent Apple-hating posts have degenerated into incoherent gibberish. Get a hold of yourself, there will be other companies for you to love after Blackberry dies.

You buy back stock when you are out of product ideas. Case closed.

Get a grip, it is over for Apple. I'm watching diehards go Android that I never thought would switch. Some still have Mac books, but are running windows 7 on them.

The flock can still be sheared for a while, but the growth is gone. Those cheap Google Nexus phones and no-contract service plans will doom all the competition.

No you buy back stock when you have more cash than you could possibly know what to do with. Unless Apple is looking to buy Exxon or Microsoft there is really no reason for them to be hoarding so much without giving it back to the shareholders.

On the contrary, a company with billions of dollars to spend finds things to buy with it, and people are employed to create/provide those goods/services.

 

[ws3]

beebee[/url]":avh1o05d]

ws3[/url]":avh1o05d]

beebee[/url]":avh1o05d]

robrob[/url]":avh1o05d]Base salary of $800k for executives is actually incredibly low, but at the same time in early 2012 these people sold hundreds of thousands of shares and took away tens of millions. It's a great strategy that Apple has, these people have become incredibly wealthy via building the value of the company rather than the usual CEO path of tens of millions in payouts when they're fired.

Except the CEO has approved borrowing money to buy back stock, boosting the stock price. Hence the CEO can play games with OPM (other people's money) to make money for himself.

Come on now, it's not as if Apple can't actually afford the stock buybacks and dividends. Even despite the recent buybacks and dividends, Apple's total cash and cash equivalents keeps increasing.

Borrowing the money makes sense because A) interest rates are so low it's basically free money and B) Apple avoids repatriating overseas cash and incurring a tax.

Really, I understand you're upset about your paymaster circling the toilet, mostly due to Apple, but your recent Apple-hating posts have degenerated into incoherent gibberish. Get a hold of yourself, there will be other companies for you to love after Blackberry dies.

You buy back stock when you are out of product ideas. Case closed.

In Apple's case, management was sitting on over $100 billion cash and getting hammered by investors looking for dividends.

I suppose it is true that Apple didn't really know what to do with the tsunami of cash that was flooding into the business. Perhaps Apple could have purchased 3 or 4 large cap companies like IBM or Intel, but would that really have improved Apple as a business?

Steve Jobs wanted to hoard it and no one was going to tell him what to do. After Jobs' death Cook agreed to measures to disburse some of the cash because either he didn't agree with hoarding more than $100 billion or didn't have the power to continue to do so.

Get a grip, it is over for Apple ... Those cheap Google Nexus phones and no-contract service plans will doom all the competition.

I get where you're coming from: "Whaaaaaa! Blackberry is doomed, so Apple must be doomed too, because Blackberry was super-awesome while Apple is super-suxxors. Whaaaaaaaa!"

 

[ws3]

jrose[/url]":2lfguvp9]

AdamM[/url]":2lfguvp9]

lotharamious[/url]":2lfguvp9]As much as this personally makes me upset since I make WAY less than this:

The rich get richer.
The poor get poorer.

What else is new?

So how did Apple rob the poor to give to Steve Jobs exactly?

It isn't a fixed pie.

Someone having billions of dollars doesn't make me any poorer.

beebee[/url]":2lfguvp9]

ws3[/url]":2lfguvp9]

beebee[/url]":2lfguvp9]

robrob[/url]":2lfguvp9]Base salary of $800k for executives is actually incredibly low, but at the same time in early 2012 these people sold hundreds of thousands of shares and took away tens of millions. It's a great strategy that Apple has, these people have become incredibly wealthy via building the value of the company rather than the usual CEO path of tens of millions in payouts when they're fired.

Except the CEO has approved borrowing money to buy back stock, boosting the stock price. Hence the CEO can play games with OPM (other people's money) to make money for himself.

Come on now, it's not as if Apple can't actually afford the stock buybacks and dividends. Even despite the recent buybacks and dividends, Apple's total cash and cash equivalents keeps increasing.

Borrowing the money makes sense because A) interest rates are so low it's basically free money and B) Apple avoids repatriating overseas cash and incurring a tax.

Really, I understand you're upset about your paymaster circling the toilet, mostly due to Apple, but your recent Apple-hating posts have degenerated into incoherent gibberish. Get a hold of yourself, there will be other companies for you to love after Blackberry dies.

You buy back stock when you are out of product ideas. Case closed.

Get a grip, it is over for Apple. I'm watching diehards go Android that I never thought would switch. Some still have Mac books, but are running windows 7 on them.

The flock can still be sheared for a while, but the growth is gone. Those cheap Google Nexus phones and no-contract service plans will doom all the competition.

No you buy back stock when you have more cash than you could possibly know what to do with. Unless Apple is looking to buy Exxon or Microsoft there is really no reason for them to be hoarding so much without giving it back to the shareholders.

On the contrary, a company with billions of dollars to spend finds things to buy with it, and people are employed to create/provide those goods/services.

With "billions" maybe. With "hundred+ billion" it's a lot harder to find something to do with it which contributes to the core competencies of the company.

Now sure that objection doesn't stop most wealthy companies. Microsoft has incinerated more cash than most companies will ever have in the first place, but Apple isn't like that. Apple hasn't been willing to throw away cash at questionable acquisitions just because it's burning a hole in their pocket.

 

[Beef Supreme]

Netguru[/url]":387zi2b8]

In japan, the companies (CEO's and their ilk), can't make more than 30 times that of the lowest paid employee.

I haven't put a ton of (or any) deep thought into this, but on the surface, that seems really reasonable. Of course, there are a ton of complications for massive US companies that would make it difficult to implement, first and foremost being how hesitant they'd be to be that transparent with their worker wages, but the idea of the CEO only being allowed to make 600k/yr because their in-house call centre technicians only make 20k/yr doesn't seem out of line.

Want more money, Mr. CEO? I guarantee that the 10% raise that you will have to give to your lowest paid staff will mean more to them than it will to you.

The cynic in me, however, realizes that if this was the case in North America, companies will just contract out as much as possible, leaving only the high salary guys on our shores.

 

[PeterWimsey]

Ledgem[/url]":fguoujrm]
I’m guessing that people will interpret your comment as hating on the successful, but this reminds me of something interesting that I heard in a psychology class. Supposedly there was a study of some sort where they catalogued traits of people across society. A fascinating connection was made: CEOs and crime bosses had a lot of shared traits. The explanation was that environment counted for a lot; the behaviors and traits that CEOs exhibited, under that environment, were accepted and led to successes, whereas it was looked down upon when dealing with “shadier business.”

I wouldn’t classify myself as someone who blindly dislikes CEOs, but I found it to be an interesting bit of information.

I'm familiar with the issue, but the original piece was a pretty bad case of link-baiting. CEO's and crime bosses may have certain similarities as the leaders of organizations, but they also have tremendous differences. Crime bosses murder people. CEO's make things.

 

[PeterWimsey]

Netguru[/url]":61n1vao0]
In japan, the companies (CEO's and their ilk), can't make more than 30 times that of the lowest paid employee. I know some of you will say this is B.S. because it's socialism. Well, Japan is as far from socialism as Bush was to being smart. There is no one person anywhere in this world that is worth millions per year. Especially those that make their money off of other people hard earned money. All you Na-Sayers out there, please tell me who is worth so much money as to hurt the public just so they can buy there next million dollar car. Of course the person that invents a method to cure cancer, should make enough money as to never have to worry about making their house payment.

This is pure envy. You want to pull people down to your level, rather than trying to rise to theirs. Not only is it venal, it's stupid.

Japan's economy sucks, their wages have stagnated for the past decade and a half, and their companies have a worse ROI than north American or EU companies. Keeping manager salaries low hasn't raised the salaries of the lowest workers; it's just led to a situation where the companies have a ton of cash and nothing to spend it on.

If shareholders agree to pay the person they hire to run the company $10 million/year, let them. It's their money and their company. There's no evidence that paying CEO's less would help society as a whole, or that CEO salaries harm the economy in any way. As I pointed out, Japan has done noticeably worse than societies without caps on executive pay.