This happens to most people – perform and you get a salary raise, and take a pay cut if you fail to live up to the expectations. This happens all over the world. But who would have thought that the same rule will apply to Tim Cook, the Chief Executive of Apple (NASDAQ:AAPL)? According to recent company disclosures, Cook’s salary and bonus took a big dip in 2016 after Apple failed to meet the sales targets.
Tim Cook and Other Top Execs Take a Pay Cut
Cook received a bonus and salary of $8.75 million last year, but in 2015, this was $10.3 million. In fact, not just the Chief Executive, the bonuses and salary payments of all the top executives of the company were slashed when Apple reported lower income and sales figures last September.
However, don’t expect Tim Cook to start looking for another job anytime soon, though, as he still ended up making more money in 2016 as Tim’s income from share sales jumped dramatically. Cook has 1.26 million Apple shares, which were valued at $135 million when he received them as the CEO. These stocks were restricted previously.
Cook’s total income for the year was 11.74 million.
This was revealed after the company made a regulatory filing recently, with the Securities and Exchange Commission. Cook has been the Chief Executive since 2011 August. This is the first time his salary or bonus payments have been reduced.
Apple Reports Poorer Net Sales and Operating Income
Apple (NASDAQ:AAPL) reported net sales of $215.6 billion in 2016, but clearly, that wasn’t going to be good enough. The figure, in the end, proved to be 7.7 percent less than 2015 as the iPhone sales were not as expected. Operating income has also come down to $60 billion, which is 15.7 percent less than the previous year.
Among the others whose salary was cut includes Apple’s senior vice president of retail Angela Ahrendts, and Luca Maestri, the chief financial officer. Angela’s pay has been reduced from $25 million of 2015 to $23 million of 2016, a close to 10 percent cut. Base salary of the chief executive was $3 million, while for the others it was $1 million.
When asked to comment, a company spokesperson said, “These results were below the target performance goals set by the Compensation Committee. As a result, the annual cash incentive payouts to our named executive officers were below target”.