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CEO Tim Cook's compensation cut by $1.5M following Apple's 2016 decline in sales

Apple on Friday revealed that its executive team, including Chief Executive Tim Cook, received a pay cut for their performance in 2016, reflecting the company's first decline in revenue in 15 years.

The docked pay comes as a result of Apple's performance-based cash incentive opportunities for its top brass. With net sales of $215.6 billion and operating income of $60 billion, Apple came in slightly short of its respective target goals set by the company's compensation committee.

"This performance resulted in a combined payout at 89.5 percent of target for each named executive officer," Apple revealed in a U.S. Securities and Exchange Commission filing.

For Cook and his team, things could have been worse: Apple's compensation committee has the ability to adjust payouts downward based on performance and individual contributions. However, the committee determined that no such further cuts would be made.

The company noted that the 2016 payments to its executive team were "significantly less" than they received in 2015, as a result of "strong pay-for-performance alignment" in their contracts.

In all, net sales were down 7.7 percent in 2016, and operating income dropped 15.7 percent.

Cook's base salary was increased to $3 million at the beginning of 2016, up from $2 million a year prior. But his total compensation reached $8.7 million, an overall reduction of over $1.5 million from a year prior.

In fact, Cook earned less in 2016 than he did two years prior, in 2014.

The base salary for Apple's other named executive officers remained steady at $1 million for 2016, though the overall compensation to them was also reduced. Other named executives at Apple include Luca Maestri, Angela Ahrendts, Eddy Cue, Dan Riccio, and Bruce Sewell.



190 Comments

bulk001 16 Years · 795 comments

While CEO's need to help their companies perform, it should be for the long run. This type of thinking makes them focus on next year's earning instead of the next 10 year's products. 

ireland 18 Years · 17436 comments

I wish the stock market somehow didn't exist. None of this crap matters.

quadra 610 16 Years · 6685 comments

What's interesting is that if these strictures were applied to the rest of the industry, executive offices would look like a barren wasteland industry-wide. Especially at Microsoft. 

Apple execs get a pay cut for a slight decline in performance, yet Nadella still has a job at Microstupid.  

therunningvm 8 Years · 96 comments

Maybe this year they will focuse more on innovation, and making better products, and stay out of politics.  

Apple has always been in politics.

macxpress 16 Years · 5913 comments

ireland said:
I wish the stock market somehow didn't exist. None of this crap matters.

And/Or, I wish Apple were a private company. I know it sounds stupid and impossible but then Apple could just focus on being Apple and not putting cash in someone's pockets 24/7/365.