Wisdom Stuff (Public Number: Zhidxcom)
Author | Cheng Qian
Edit the | LI Shuiqing
Cook's salary can't hold up!
According to a document released by Apple, Apple CEO Tim Cook voluntarily asked for a salary cut, and his target salary will be reduced by $35 million (236 million yuan).
In other words, Cook's target salary will fall from US$84 million (566 million yuan) in 2022 to US$49 million (330 million yuan), a decrease of more than 40%.
▲Changes in Cook's salary (Source: Apple's official website document)
In fact, Cook's actual income in 2022 reached US$99.4 million (668 million yuan), which is US$15 million (101 million yuan) more than the target salary.
In addition, Apple also disclosed the 2022 compensation of the chief financial officer, general counsel, retail executive and chief operating officer, and the total compensation of these executives including salary, bonuses and stock is about 27 million US dollars (equivalent to 181 million yuan), a slight increase from 2021.
Apple also announced that its annual shareholder meeting will be held online on March 10.
First, the basic salary and bonus will remain unchanged, and the equity incentive will be cut in half
In order to set Cook's new compensation, Apple's board's compensation committee struggled with "balancing shareholder feedback, Apple's performance, and Cook's proposal to adjust salary based on feedback."
Cook's total salary includes three parts, a basic salary of US$3 million (RMB 20 million), a bonus of USD 6 million (RMB 40 million), and a part of equity awards. The part of this salary adjustment also belongs to the third part, which is also the most important and largest part of its compensation.
In 2022, the value of Cook's equity awards is estimated to be about $75 million (504 million yuan), half of which is linked to Apple's stock performance, which this year dropped to $40 million (269 million yuan), and the compensation committee increased its share of stock performance to 75%.
Taking into account Apple's overall size and performance, the compensation committee also intends to set Cook's target annual salary in the coming years at between 80% and 90% of its corresponding key peer CEO.
Second, sky-high salaries have been opposed, and employees' income is only 1/1400
In 2021, Cook's stock and cash income reached $98.7 million, up 571% year-over-year. This has also led some shareholders and consulting firms to oppose Cook's sky-high salary plan.
In early 2022, shareholder services firm Institutional Shareholder Services advised Apple investors to refuse to grant Cook a $99 million compensation package, saying it was "seriously concerned" about the excess compensation equivalent to 1,400 times the income of the company's average employee.
However, at Apple's annual shareholder meeting last year, a majority of shareholders voted to approve the plan. At the time, the head of Institutional Shareholder Services, a shareholder service firm, complained that Cook's stock would remain with him after he retired and that half of the rewards did not depend on performance criteria such as the company's share price.
This is because before the adjustment, 50% of the value of Cook's equity award was based on the performance of the stock, and the other 50% was expected to work for hours, etc.
Cook's salary reduction has actually been traced, and since this year, Apple's performance has also been affected in the context of the economic environment.
Apple's chip business is in trouble, the long-rumored XR (mixed reality) headset has not been officially released, and the car project has been brewing for several years without results... All make Apple, which has a "mid-life crisis", face a crisis.
At the beginning of this year, Apple's market value fell below $2 trillion, compared with its market value of more than $3 trillion a year ago, and the iPhone as Apple's cash cow is also facing sales challenges, and many investors are beginning to worry that under the general environmental recession, consumers' purchasing power for high-priced electronic products will decrease.
As of the close of trading on January 12, Apple's share price was $133.41 per share, and the market value has recovered slightly from the beginning of the year to $2.12 trillion.
▲Apple stock price
Conclusion: With only three years left in his term, "middle-aged" Apple has a hard time innovating
Apple, which has created a number of "firsts" in the consumer electronics industry, has also grown less than expected in the context of the global economic environment, with plummeting market value, weak new device launches, and difficult technological innovation, all of which indicate that the technology giant's life is facing hidden worries.
In this context, Cook's voluntary salary cut saved the company 200 million yuan, allowing Apple to tide over the slowdown in the consumer electronics industry.
According to Apple's current planning, Cook's term of office is only three years, and he will step down as CEO in 2026, which will also be a key moment to determine whether the "middle-aged" Apple can once again lead the development of the consumer electronics industry in the future.