[HN Gopher] Apple CEO Tim Cook requests and receives a 40% pay cut
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Apple CEO Tim Cook requests and receives a 40% pay cut
Author : amrrs
Score : 106 points
Date : 2023-01-24 18:13 UTC (4 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| EligibleDecoy wrote:
| Tim, despite heading one of the top performing publicly traded
| companies has taken a pay cut to somewhere between 80th-90th
| percentile of "their peers". But this does not seem as impressive
| knowing only 64% of shareholders supported his 2021 compensation
| (compared to 95% in 2020). Looks like Alpahabet is cutting exec
| compensation as well.
|
| But hey, I mean as far as gestures go, this at least in line with
| "taking responsibility" for company performance. Better than not
| taking one, I suppose.
| jjeaff wrote:
| Apple hasn't had big layoffs yet. My guess is that this is a PR
| move preceding a layoff announcement soon to come.
| dvngnt_ wrote:
| I'd be surprised. they didn't hire nearly as much as other
| peers and they're not one to follow trends like google
| ripvanwinkle wrote:
| If this happens at more companies, eventually the entire field
| will come down meaningfully so that the compensation at the
| 80th percentile might become the 90th percentile over time
| martin1975 wrote:
| If this staves laying people off, then I'm all for it.
| Maursault wrote:
| Why does _Tim_ get _everything_ he wants?!
| moffkalast wrote:
| Tim Apple doesn't request what Tim Apple wants for Tim Apple,
| Tim Apple requests what Tim Apple receives because Tim Apple
| is... Tim Apple.
| EligibleDecoy wrote:
| Here's the relevant excerpt from the SEC filing (page 11, edited
| for brevity):
|
| """
|
| The Compensation Committee evaluates and makes compensation
| decisions prior to the start of each fiscal year... The
| Compensation Committee balanced shareholder feedback, Apple's
| exceptional performance, and a recommendation from Mr. Cook to
| adjust his compensation in light of the feedback received. The
| Compensation Committee ... believes [the incentive changes] are
| responsive to shareholder feedback, while continuing both to
| align pay with performance and to recognize Mr. Cook's
| outstanding leadership.
|
| Mr. Cook's 2023 target total compensation is $49 million, a
| reduction of over 40% from his 2022 target total compensation.
| ... [T]he Compensation Committee also intends to position Mr.
| Cook's annual target compensation between the 80th and 90th
| percentiles relative to our primary peer group for future years.
|
| The percentage of performance-based RSUs granted to Mr. Cook was
| increased from 50% to 75% of his 2023 target equity award and the
| percentage of his performance-based RSUs will be at least 75% of
| his target equity awards for future years.
|
| The time-based RSUs awarded to Mr. Cook for 2023 provide for pro-
| rata instead of full vesting in the event of retirement during
| the term of the award. The Compensation Committee intends to
| maintain this same structure for future years.
|
| """
| bilekas wrote:
| Imagine 49 million being a 40% cut in your salary. Poor guy.
| adamwong246 wrote:
| Tim knows his employees are not stupid. That's why he hired them-
| they are smart, smart enough to know when they are being led to
| the shed out back. And Tim also know that that frightened cows
| produce bad milk. So he makes the smart move to keep his
| employees close, even at the expense of some short term loss, and
| as a bonus, he looks like a saint in comparison to all the other
| CEO's who shed their workers like dead weight.
| UniverseHacker wrote:
| Let's start a gofundme, so he can afford food for his family.
| zactato wrote:
| Is this more aimed at Shareholder happiness or internal
| perception among employees?
| bmitc wrote:
| Tim Cook is a billionaire. Who cares?
| cpncrunch wrote:
| People care because it shows that Apple (and Tim Cook) are
| listening to their shareholders.
| bmitc wrote:
| So is it fair to say that the title is misleading given that
| the shareholders, specifically institutional shareholders,
| requested the decrease in pay and Cook simply obliged?
|
| Also, institutional shareholders are just other billionaire
| individuals and institutions. I think I care even less about
| their financials.
|
| If reductions in pay of executives somehow made it to
| consumers, then that would be interesting.
| SettembreNero wrote:
| Also worth mentioning that he got a ~%500 raise in 2021
| artogahr wrote:
| Not sure why this isn't mentioned more often.
| swiftpoll wrote:
| Above a certain pay I don't think money matters unless it's a
| large purchase. Like a yacht.
| verall wrote:
| For comparison, Jensen's (Nvidia CEO) total compensation was
| $23.7M in FY2022.
| herendin wrote:
| I wish we could all be mature enough that such pointless symbolic
| gestures were not necessary. This causes no hardship for Tim and
| makes no non-negligible impact on Apple's financials or employee
| wellbeing
| galoisscobi wrote:
| Isn't it fun to move goalposts! On layoff threads, people
| comment that the CEOs "taking full responsibility" should cut
| exec pay. Now we have a company that hasn't had any layoffs and
| the CEO is taking a paycut and it's a pointless symbolic
| gesture.
| fsckboy wrote:
| if it's different people making the comments, then they don't
| need to be consistent.
|
| and if the same, then if their outlook has class struggle
| leanings, they're being entirely consistent, capitalist class
| bad.
| herendin wrote:
| I moved my goalposts?
| saghm wrote:
| The goalpost comment really isn't necessary; there are a lot
| of people on this site, and it's inevitable that conflicting
| opinions will get expressed. I think there's an interesting
| point to be made about how widely differing expectations can
| make it difficult for public figures to avoid criticism from
| one group or another, but it's muddled by the dubious
| assumption that people commenting on articles are some
| monolithic unit rather than a varying set of individuals from
| one article to the next, each of whom have potentially unique
| perspectives and aren't necessarily the same people who
| commented on a different thread.
| blululu wrote:
| Consider the growing list of CEO who have "taken full
| responsibility" for layoffs without taking on any of the
| downside. Even on a symbolic level this is the right thing to
| do, but practically speaking it signals some sense of skin in
| the game which is sadly lacking from CEO's who let go of staff
| without acknowledging that it was a failure of their management
| in any material terms.
| juve1996 wrote:
| CEOs are too rich to ever have skin in the game. It's a
| meaningless exercise.
|
| Tim Cook will never feel the pain of a layoff like someone at
| the genius bar.
| throwaway5959 wrote:
| I'm curious what your reaction would be if he got a 40% pay
| increase.
|
| Frankly it's refreshing to see a CEO cut his own pay vs
| continuously increasing it regardless of how well the company
| performs.
| juve1996 wrote:
| What does "refreshing" even mean?
|
| What would be refreshing is an adequate social safety net.
| Not mega rich getting slightly less megarich.
| throwaway5959 wrote:
| I don't think those two are remotely related to each other.
| You could drain the wealth of the top 1000 people to zero
| and still not support a social safety net in perpetuity.
|
| To put some numbers behind it, the 735 billionaires in the
| world are worth $4.7 trillion total. Spread evenly across
| only 300 million people that's only $15.6k each. Then that
| money is all gone.
| juve1996 wrote:
| You've created a strawman here.
|
| First, a safety net wouldn't apply to 300 million people,
| only a small percentage of that who need it when it's
| necessary. Second, I'm not suggesting it is solely funded
| by taxing the megarich.
|
| Other nations already offer healthcare. This isn't
| mathematically infeasible, it's been done elsewhere, and
| done for years.
| herendin wrote:
| >I'm curious what your reaction would be if he got a 40% pay
| increase.
|
| It would be equally performative. This is morality theater.
| I'd only question his judgment about public relations.
|
| I _do_ understand the reasoning for this adjustment of his
| salary. I 'm simply saying I wish it was not necessary. It's
| sad.
| jklinger410 wrote:
| Apparently you think Tim Cook already has an infinite
| amount of money.
|
| In that case, many leading CEOs are just taking symbolic
| salaries to do their jobs. I wonder why they even bother.
| motoxpro wrote:
| By that logic he should have just kept is salary what it was.
| His salary now is about .05% of the companies revenue. That
| would be like the CEO of Mailchimp making 350k
| jklinger410 wrote:
| It's insulting to say that someone giving up a potential income
| amount that I will never achieve cumulatively in my entire
| lifetime is symbolic and pointless.
| bsaul wrote:
| symbolic gestures constitute a large part of the fabric of
| society. Saying "thank you" to someone doesn't provide any
| value, yet you do it, and people appreciate it.
| herendin wrote:
| >symbolic gestures constitute a large part of the fabric of
| society.
|
| In fact, we all know that saying Thank you may provide real
| value to both sides, because we mean it
|
| But meaningless gestures, such as a billionaire at a wealthy
| and healthy company taking a paycut, harm and devalue our
| social fabric
| wins32767 wrote:
| I find it encouraging that our institutions are able to
| begin to course correct, that's reknitting the frayed
| social fabric from my perspective.
| quitit wrote:
| This isn't a PR exercise. Context is needed as below:
|
| 1. Shareholders have a "say-on-pay" vote, this is non-binding,
| but gives the board an idea of shareholder attitudes.
|
| 2. Institutional Shareholder Services raised concerns with
| their clients about Tim Cook's pay and requested that they vote
| against Tim's proposed package.
|
| 3. The approval vote dropped to 64% (usually around 95%).
|
| 4. Members of the compensation team engaged shareholders for an
| idea about where to set compensation. Tim then requested that.
| herendin wrote:
| >This isn't a PR exercise. Context is needed
|
| Thank you for explaining the context so well. But I disagree
| with your first claim. I'm saying it is totally a PR
| exercise.
| Kukumber wrote:
| Clearly you don't understand..
|
| It affects the morale of your employees, knowing even your
| execs bear the price of struggle helps with mental health
|
| It's documented and Nintendo applied it countless times during
| its history, look at the result today
|
| https://www.polygon.com/2013/7/5/4496512/why-nintendos-sator...
|
| I laugh at these companies laying off random people instead of
| cleaning up execs/managers, they treat their workforce like
| livestock, no wonder they are showing poor results lately
| layer8 wrote:
| This just demonstrates that shareholders do have a say, which
| presumably is how it should be.
| mkraft wrote:
| you know you're rich when
| stefanos82 wrote:
| To me this looks like a smart move on Tim's behalf, because if
| layoffs are coming, he will say "hey, I did my part and still
| things did not work they way we expected to; so please accept my
| sincere apologies in advance, but we need to layoff some
| teams...I hope you understand!"
|
| I could be wrong, but it has some form of logic in it...
| akmarinov wrote:
| Google, Meta, Microsoft, Amazon CEOs: "Yeah, we are doing
| layoffs, that's totally my fault and I take the whole blame." -
| they cut 10-15% of workforce, no repercussions for them
|
| Apple CEO: "no layoffs here, but maybe cut my salary by 40%"
|
| And yes, I know $50 million is couch change for Tim Apple
| jayd16 wrote:
| I guess I really don't get the sentiment here. Layoffs are
| inherently bad and not just reflective of the market changing
| focus from growth to profits? Why is it clear that layoffs
| should have repercussions?
|
| What does it mean when almost every big company's management
| made the same mistake?
|
| I'm all for worker protections and good severance and
| unemployment benefits and its not great to be laid off but
| these takes just don't resonate with me.
| kag0 wrote:
| Losing your job is a big deal to the average person, but a
| salary cut is immaterial to a big tech executive. An
| executive salary cut would save hundreds of jobs. People are
| laid off because the company is trying to spend less. There
| are multiple people in the same role and the headcount can be
| decreased to decrease spend on overall salary without
| decreasing the salary of individuals. But just because there
| is only one person in each executive role does not mean that
| money can't be saved on executive salaries.
| jayd16 wrote:
| This is a misdirection. CEO salaries can be set to zero for
| all I care. I just think the idea that reducing headcount
| is not a legitimate strategy seems naive to me.
| Volundr wrote:
| I'd argue if a company has failed to plan a smooth transition
| from growth to profit, that's a failure of that companies
| leadership.
| jayd16 wrote:
| It seems hard to compete with a smooth strategy if every
| competitor can react faster than you?
|
| I also don't understand what a smooth strategy does in real
| terms. Layoffs should have been in smaller increments,
| started sooner, and lasted longer?
| baryphonic wrote:
| Because most mgmt seems to have no skin in the game. When
| they make bad decisions, the underlings often pay for it.
| This is especially true when they write corpo-speak blog
| posts "taking responsibility," which includes laying off 10%
| of the workforce.
|
| A CEO cutting his own pay seems like a much better first
| step. It signals accountability.
| amf12 wrote:
| > Because most mgmt seems to have no skin in the game
|
| This is not true. Most executives' compensation is tied to
| equity. For example, Tim Cook's base pay + bonus is 9M, but
| he has 40M in equity comp (performance + time based).
|
| > A CEO cutting his own pay seems like a much better first
| step. It signals accountability.
|
| This, I agree with.
| CoolGuySteve wrote:
| Yeah, how about if you lay off more than 1% of a publicly
| traded company, top level executive compensation must be 0 for
| the year.
|
| Right now there's a misaligned incentive to perform layoffs in
| order to appease investors (including those in the boardroom)
| and pump the stock price even if the company is doing well.
| wikfwikf wrote:
| If investors see layoffs and judge that the company just
| became more valuable, either they are right or they are
| wrong.
|
| If they are right, then isn't the job of management, in a
| principle fundamental to the US economic system, to follow
| their wishes? Management doesn't have to do whatever
| investors ask for, but there is no real justification for
| them to do something which is both against their wishes and
| against the interests of the company.
|
| If they are wrong, then surely the problem is that most US
| companies are having their decision-making driven by a group
| of people who are paramount but who are making misguided or
| misinformed decisions. Any tweaking of the exact incentives
| which doesn't solve this problem is both a distraction and
| subject to the law of unintended consequences.
|
| Note that I am not strongly in favor of either sweeping
| layoffs or of the specific US variant of capitalism in
| general. I just think that one should be honest about to what
| extent problems are unavoidable to the extent that one
| cleaves to a given system.
| flandish wrote:
| I've been noodling around this thought that businesses that
| provide "necessary for life and health" services (power,
| food, housing, healthcare, and tech) should not be allowed to
| make more than X profit year over year, provide bonus to C
| level and up, or give dividends/buybacks if, within a rolling
| 3 year period they have laid off anyone for a "financial"
| reason, or not increased employee wages tracked with
| inflation.
|
| Those that ignore that rule become heavily fined.
| lost_tourist wrote:
| That's not the way companies and capitalism works, nor a
| company. Most of these firings are because they were booming
| during the pandemic. The role of a publically traded company
| isn't to provide jobs, it's to provide return on investment,
| and however the people who run a company see that should be
| carried out. I wish they could see beyond a quarter of two
| and see the value of building employee loyalty, but that
| seems to be a thing of the past.
| 1123581321 wrote:
| That would be trivially gamed by either requiring more
| compensation up front or the CEO simply behaving against the
| interests of the company during hard times.
| CoolGuySteve wrote:
| CEOs currently get paid either way, either by golden
| parachutes and retention bonuses when the company fails or
| by big paydays when the company grows.
|
| It's in the best interest of the shareholders that the CEO
| of a failing company either have faith that it will turn
| around or negotiate an acquisition. I don't believe this is
| the case with current executive compensation structures.
|
| And at least this penalty would be an incentive towards
| shrinking the company via attrition instead of disrupting
| the lives of thousands of employees and shocking the labour
| market.
| 1123581321 wrote:
| I understand your sentiment and I agree that a slow
| trickle of attrition, if executed well and not coupled
| with an overly conservative hiring rate, would be one of
| the better side effects of your proposal.
| Retric wrote:
| CEO's don't have infinite leverage to negotiate
| compensation.
| rebel wrote:
| Why would the executive (or anyone) continue to do the job?
| [deleted]
| dumbfounder wrote:
| Think of it as an investment not a job. Plenty of people do
| startups and take zero salary early for the upside later
| on.
| qwytw wrote:
| So would those executives be stripped of their stock that
| they acquired earlier if they decided to leave. Or how
| would it work?
| nxmnxm99 wrote:
| ...what? All the executives would leave. What are you talking
| about
| fancyfredbot wrote:
| Cut the dividend, not exec compensation.
| scarface74 wrote:
| So in that case they would just reduce hiring.
| Volundr wrote:
| Which would be a good thing compared to mass layoffs, no?
| scarface74 wrote:
| No.
|
| It's better to have loved and to have lost than to never
| have loved at all.
|
| I would much rather have been hired at AWS in mid 2020
| (which I was), make over six figures more over the next
| two years than I would have anywhere locally (I work
| remotely) and gotten laid off (I haven't) than not be
| hired at all.
| Volundr wrote:
| What makes you assume you wouldn't have simply found
| another well paying position, and still had it, since in
| this scenario companies are now thinking about hiring
| sustainably?
|
| I too work remotely making more than I would locally, and
| I left my previous company for a new place only to be
| laid off six months later. I would far rather not been
| hired into the new company and still be where I was at
| than suddenly job hunting (I have plenty of runway, I
| should be fine).
| scarface74 wrote:
| > What makes you assume you wouldn't have simply found
| another well paying position, and still had it, since in
| this scenario companies are now thinking about hiring
| sustainably?
|
| Well, in my specific case do you know of any other major
| tech company that would have hired me to consult other
| enterprise companies on how to develop on top of AWS?
|
| > and I left my previous company for a new place only to
| be laid off six months later. I would far rather not been
| hired into the new company and still be where I was at
| than suddenly job hunting (I have plenty of runway, I
| should be fine).
|
| I changed jobs 6 times between 2012-2020. I stay prepared
| to interview.
| curiousllama wrote:
| Doesn't Zuckerburg not take a salary?
| Alupis wrote:
| Salaries for most of these Tech CEO's are irrelevant. This
| gesture from Cook is all about the PR and will have nearly
| zero (or zero) impact on his daily life and compensation from
| running Apple. It looks really good though, and makes for a
| great headline.
|
| For these folks, it's all about the stock.
|
| By making this salary cut into a PR event, Cook's long term
| compensation is likely to skyrocket as shareholders reward
| the company's direction.
| cma wrote:
| The article says this is a total comp cut, not just a
| salary cut. Salary before stock incentives for 2022 was
| only $3 million or so. I'm not sure what it had gone up to
| for 2023, but if it is a similar ratio of salary to other
| incentives, almost all of this 40% cut would be through
| stock incentive cuts wouldn't it?
| Alupis wrote:
| What you say is true. The comment I was responding to
| mentioned other tech ceo's with a token or no salary.
|
| Regardless, Cook already owns a massive amount of stock.
| The PR event, and the eventual rise in Apple's price will
| reward Cook massively over the long term.
|
| It also paves the way for a dramatic increase in total
| compensation when the economy gets back to normal and
| Apple share price rises with the tide naturally.
| [deleted]
| cableshaft wrote:
| I know whose stock I'll be buying for the forseeable future
| (Apple). I have both Google and Apple stock, but I'll stop
| buying Google for now.
|
| For most of these big wig shareholders it's probably the other
| way around, though.
| onlyrealcuzzo wrote:
| $50M pays for like 100 employees at Apple.
|
| It's not saving the company from doing 10% layoffs.
|
| Not even 0.1%...
| uuddlrlrbaba wrote:
| This seems mostly to be a gesture towards some approximation of
| solidarity with staff during a time of mass layoffs in the
| industry.
|
| And I think it's a good move, if only to help make apple staff
| feel slightly more comfortable in their jobs. And help keep
| productivity and timelines on track.
| couchdive wrote:
| ah, isn't the bulk of compensation in stock anyways?
| sophacles wrote:
| If only there was more textual information as a supplement to
| the headline. I imagine such a supplement (which I'm going to
| call "article" since it's a fun word) would provide details
| about the headline. In this case, such an article would maybe
| explain why that was happening... i don't know, say maybe
| investors not approving of his salary the same anymore. I
| imagine the article might go into whether that's salary or
| total comp, and maybe a breakdown of what that total comp
| means. Bonus, what I imagine to be a decent article they would
| even mention restructuring of incentives if that was involved.
|
| What a world that would be.
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