Apple CEO Tim Cook. (Photo: Justin Sullivan, AFP)
Washington - Apple Chief Executive Officer Tim Cook received a 74% 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.
Cook’s incentive pay totalled $9.33m for the year ended September 30, the Cupertino, California-based company said on Wednesday in a regulatory filing. He also took home $3.06m in salary and a previously disclosed equity award of $89.2m, bringing his total pay out for the year to about $102m.
His top five lieutenants each got bonuses of $3.11m, bringing their total compensation to about $24.2m 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 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% over that span, including reinvested dividends.
In August, Cook collected 560 000 shares when part of his 2011 mega-award vested because Apple outshined more than two-thirds of the S&P 500 over three years.
For the first time, Cook ran up a $93 109 bill for traveling on private aircraft on non-business-related trips. The Apple board stipulated this year that for security reasons the CEO should use private planes for business and personal travel, citing the risk given his high profile. Personal security costs were calculated at $224 216.
Apple shares returned 39% in fiscal 2017, more than double that of the S&P 500. In November, 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.
In December, he resumed direct management of product design teams after working on the new Apple Park headquarters for the past two years.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER