Apple CEO Cook received a cash bonus of $2.8m for 2012, or 200 per cent of his salary
Apple argued in its filing that Cook's cash pay was "significantly below" the median for CEOs
Cook's base salary was raised by 51 per cent to $1.4m but he received no equity awards
Tim Cook’s total pay package for leading Apple fell sharply in 2012 although the technology giant’s chief executive saw a big rise in the paper gains on stock awarded in previous years.
Taking stock awards into account, Cook’s total pay fell by 99 per cent to $4.17m for the year to September 29, according to a filing on Thursday to the US Securities and Exchange Commission.
Cook’s base salary was raised by 51 per cent to $1.4m but he received no equity awards after his grant of 1m shares in 2011, which vest to the chief executive over a five- to 10-year timeframe as long as he remains with the company.
The stock awards, an exceptional grant after Cook became chief executive, were worth $378m at the time. The total of 1.125m shares that could vest to Cook were worth $750m on paper at the company’s fiscal year end, on September 29.
The sum reflects the rise in Apple’s share price during 2012, which despite a decline over the past two months is still up by more than 25 per cent in the year to date.
Cook received a cash bonus of $2.8m for 2012, or 200 per cent of his salary, because Apple’s operating performance exceeded the company’s targets.
Peter Oppenheimer, Apple’s chief financial officer, saw his base salary increased by 15 per cent to $805,400 and received stock awards worth $66m.
Apple argued in its filing that Cook’s cash pay was “significantly below” the median for chief executives of Apple’s peer companies. Other Apple executives received salaries and bonuses which are in line with peers, the company said.
Apple said its size and rapid growth meant adjustments were required to the peer group of companies used to assess appropriate remuneration. Texas Instruments, a component supplier to the iPhone, was removed, while DirectTV and Viacom were added to a group that already includes Google, Microsoft, Dell, Cisco, Intel and News Corp.
A new comparator group of “general industry mega-cap companies” was also created to provide a “broader perspective” on pay, including ExxonMobil, which Apple overtook to become the world’s most valuable company earlier this year, Berkshire Hathaway, Walmart and General Electric.
Apple said that it emphasised “restricted stock units” with long vesting periods in its remuneration packages to help retain employees and ensure a long-term focus. It usually makes stock grants every two years.
“Accordingly, the compensation shown for each named executive officer will generally be comparatively high for the years in which the company grants RSU awards to the officers and comparatively low for the years in which the company does not grant RSU awards,” Apple said in its filing.
At the last annual meeting, 83 per cent of Apple shareholders voted in favour of the company’s pay policies.
During the financial year ending September 2012, Apple’s revenues grew by 45 per cent to $156.5bn, exceeding the maximum target for bonus calculation of $140bn, with net income rising 61 per cent to $41.7bn.
Apple’s compensation committee is chaired by Andrea Jung, the outgoing chief executive of Avon, the cosmetics company.