Just days after becoming the first publicly-traded company to see its valuation cross the $3 trillion mark, Apple released its proxy statement ahead of its annual meeting, which is set for early March, which offered some interesting insights about its executive compensation.
The statement revealed that thanks to his stock-based compensation, Apple CEO Tim Cook earned nearly $100M during 2021, which is more than 1,400x the median pay at Apple (in 2021, median pay rose to $68,254, up from $57,783 during the prior year. Apple said the change was due to changes in hiring and compensation).
The massive payday helped push Cook's net worth past the $1 billion mark. Here's the breakdown, courtesy of Reuters.
Cook's salary remained at $3M, but he received $82.3M in stock awards, $12M for hitting Apple's targets and $1.4M for air travel, 401(k) plan, insurance premiums, a vacation cash-out and other compensation. In total, he earned $98.7M, compared with $14.8M in 2020.
But as Apple Insider pointed out, Cook's biggest windfall wasn't even included in his pay package: In August 2021, he vested the maximum amount from a performance-based incentive package. He vested the maximum amount, and in August he received 5M shares, worth $754M at the time.
These two major windfalls pushed Cook's personal wealth north of $1 billion, Apple Insider said.
Not all of this massive award in restricted stock will vest right away: it's expected to vest in annual installments between 2023 and 2025. Although the non-performance-based portion of this compensation will vest even if Cook leaves the company.
Judging by movements in the company's share price since Cook took over in 2011 (just months before Apple founder Steve Jobs died), his massive compensation is worthwhile: shares have risen more than 1,000% since then.
The big difference-maker for Cook: In September, the Apple chief received 333,987 restricted stock units in his first stock grant since 2011. The award was part of a long-term equity plan which will see him awarded the next chunk of stock in 2023.
American CEOs were paid 351x more than their typical worker in 2020, according to a report by the Economic Policy Institute. The study also showed that the compensation of top CEOs grew roughly 60% faster than the stock market from 1978 to 2020, eclipsing the slow 18% growth in a typical worker's annual pay.