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Apple Cuts Tim Cook's Pay After 2016 Performance Falls Short (cnbc.com) 336

Apple cut CEO Tim Cook's 2016 pay after the iPhone maker missed its revenue and profit goals for the year. From a report on CNBC: Although Cook's annual salary went up by $1 million, he received $8.75 million in total compensation for the year, according to an SEC filing posted on Friday, down from the $10.28 million he received in 2015. Company executives received about 89.5 percent of their targeted annual incentives. The company said its annual sales were down nearly 4 percent, or $215.6 billion, from its target of $223.6 billion, and its operating income was down 0.5 percent from its target at $60 billion, according to the filing.Apple last year faced declining revenue as it grappled with the first prolonged slump in iPhone sales. The salary of some other executives were also trimmed.
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Apple Cuts Tim Cook's Pay After 2016 Performance Falls Short

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  • by Anonymous Coward on Friday January 06, 2017 @10:30AM (#53617011)

    Thin will be in until he's removed as CEO. HP made their laptop 1.8mm thicker for a third more battery life in order to drive their 17" 4K monitor. Apple needs to do the same.

    • by timholman ( 71886 ) on Friday January 06, 2017 @03:00PM (#53619207)

      Thin will be in until he's removed as CEO. HP made their laptop 1.8mm thicker for a third more battery life in order to drive their 17" 4K monitor. Apple needs to do the same.

      The fact that Apple significantly reduced the capacity of the batteries in the 2016 models just to make them thinner says volumes about the design choices going on behind the scenes. It's all part and parcel with the removal of the MagSafe connectors, the removal of all ports except USB-C. The people who are deciding how a "professional" laptop should be designed are clearly not using a laptop in a professional capacity.

      • Thin will be in until he's removed as CEO. HP made their laptop 1.8mm thicker for a third more battery life in order to drive their 17" 4K monitor. Apple needs to do the same.

        The fact that Apple significantly reduced the capacity of the batteries in the 2016 models just to make them thinner says volumes about the design choices going on behind the scenes. It's all part and parcel with the removal of the MagSafe connectors, the removal of all ports except USB-C. The people who are deciding how a "professional" laptop should be designed are clearly not using a laptop in a professional capacity.

        They are designing it around what accessories/peripherals they can squeeze out of you after the purchase while keeping their products the same price. The total cost of ownership for the new Macbooks is going up a few hundred dollars per person.

        • by dgatwood ( 11270 )

          Except that what they forgot was that if we wanted a [expletive deleted] iPad with a keyboard, we would have bought one. We buy a MacBook( | Air| Pro) because it gets the job done, and as soon as they remove parts that we depend on, or compromise it in such a way that it no longer gets the job done, we'll wait to buy an upgrade until they fix it, or if necessary, switch platforms entirely.

          Things got so bad this time that OWC is in the planning stages for a product called DEC [owcdigital.com] that adds back most of the stu

  • But why? (Score:5, Insightful)

    by jandersen ( 462034 ) on Friday January 06, 2017 @10:34AM (#53617049)

    The question that never seems to get asked is: Why do these executives get these incredible salaries? Does anybody - apart from the tiny elite at the top - really think it is good value for money?

    • Re:But why? (Score:5, Insightful)

      by CajunArson ( 465943 ) on Friday January 06, 2017 @10:47AM (#53617191) Journal

      What's so "incredible" about a $9 million salary for the CEO of one of the most valuable companies anywhere?

      It's downright pedestrian compared to what many sports players get to throw a ball or make tackles, and it comes with a massively higher responsibility to boot.

      • I've thought about this a lot. I waver between a few thoughts.

        Capitalistic arrogance: After gaining enough success, these people begin to believe they are largely responsible for the success of such a large organization. Much like celebrities mistakenly begin to believe they are the pillars of the society just because they look good on tv. This especially feels true when lower employees are getting the boot and the CEO is getting a bonus.

        or maybe

        Because they can. The CEO's salary distributed among
      • What's so "incredible" about a $9 million salary for the CEO of one of the most valuable companies anywhere?

        It's downright pedestrian compared to what many sports players get to throw a ball or make tackles, and it comes with a massively higher responsibility to boot.

        Remember that Steve Job's salary was $1. Why? Because it's good PR, and it results in tremendous tax savings by shifting the income to capital gains. Tim Cook has been paid nearly $400 worth of Apple stock with another nearly $400 million upcoming in the next few years. His tax savings by paying capital gains taxes instead of income taxes will exceed his entire salary.

        • by cdrudge ( 68377 )

          Tim Cook has been paid nearly $400 worth of Apple stock...

          So almost 4 shares. Impressive.

      • by mjwx ( 966435 )

        What's so "incredible" about a $9 million salary for the CEO of one of the most valuable companies anywhere?

        It's downright pedestrian compared to what many sports players get to throw a ball or make tackles, and it comes with a massively higher responsibility to boot.

        Unlike a sports player, a CEO's primary income is not their salary. You see the issue is that salaries are taxable, cant easily be hidden or transferred offshore or disappeared down a loophole. CEO's have many other income streams, stocks and options for one and Cook will definitely be receiving dividends from Apple. This is why Brin and Page at Google have a $1 salary, it's all a tax dodge.

        What's happened here is that Apple needs to keep the marketing hype in overdrive as they're bleeding customers. Thi

    • Re:But why? (Score:4, Insightful)

      by The-Ixian ( 168184 ) on Friday January 06, 2017 @10:52AM (#53617261)

      They are the person where the "buck stops". Apple has a bad year? Blame the person at the top. Apple had a great year? Praise the person at the top.

      That's a lot of pressure. I think I would pass on 9 million/year for that kind of responsibility. I live ok. I don't have access to all the toys, but I am relatively happy with what I got.

    • The question that never seems to get asked is: Why do these executives get these incredible salaries? Does anybody - apart from the tiny elite at the top - really think it is good value for money?

      The question that never seems to get asked: What business is it of yours what some else at a private company gets paid? Apparently, the board of directors think it is good value for the money. If they didn't, the board of directors and stockholders will get rid of them and hire someone else. I'm not a Tim Cook fan, and I think he's made several bad decisions, but I'm not a stockholder--or a busybody either.

      • The money they pay those high-priced exec doesn't come out of thin air, it comes directly out of our pockets, in the form of higher prices and lower wages.

        • The money they pay those high-priced exec doesn't come out of thin air, it comes directly out of our pockets, in the form of higher prices

          So you really think Apple bases their prices on how much they are paying their executives? Guess again.

          and lower wages.

          There is no pie. Someone making more money doesn't automatically mean someone else is making less.

          • The pie is the total revenue of Apple (specifically, $215.6 billion) so every penny that Tim Cook and the other executives get is a penny that didn't go to the people actually doing the work. Yes, I realize it would only be a difference of a few cents per employee, but it's still unfair for one person to make more in one day (day after day) than most people make in a year.

        • by tsqr ( 808554 )

          The money they pay those high-priced exec doesn't come out of thin air, it comes directly out of our pockets, in the form of higher prices and lower wages.

          OK, what would happen if Cook was paid $0 per year and the money spread among the employees in the form of pay increases? Apple directly employs 66,000 people in the US. Dividing Cook's $8.75 million annual pay among them would increase their pay by a whopping $2.54 per week; more than enough for a venti Starbucks coffee. The non-US employees will have to continue getting by on their current wages.

          Well, maybe we should use that money to decrease the price of iPhones instead. Apple sold about 212 million iP

          • I wasn't referring to just Tim Cook, I was referring to every top-executive at every company who also receives non-salary compensation.

            If all of Apple's suppliers dropped their prices (by cutting executive salaries) it would drop the cost more. And if the supermarket chains, utility companies, gas companies, etc did the same, you money would go further.

            High executive salaries (and stock dividends, aka 'paying rich people simply for being rich') are the vampires sucking the money out of the economy, and incr

            • by lgw ( 121541 )

              The same math works for almost every CEO, is the thing. You're not getting paid noticeably less because your CEO is paid well - it just doesn't work that way. Jealousy and envy are not good character traits.

    • The question that never seems to get asked is: Why do these executives get these incredible salaries? Does anybody - apart from the tiny elite at the top - really think it is good value for money?

      It's obvious to most people. If you have to pay $2M more to get an exec who's better than the other guy enough to net your company an additional $2B in profit, there's not even a question on the table - you'd be crazy not to.

    • Re:But why? (Score:5, Insightful)

      by Trailer Trash ( 60756 ) on Friday January 06, 2017 @11:50AM (#53617831) Homepage

      The question that never seems to get asked is: Why do these executives get these incredible salaries? Does anybody - apart from the tiny elite at the top - really think it is good value for money?

      That's not really the question. Steve Jobs was demonstrably worth hundreds of billions of dollars to Apple's shareholders.

      The real question is "why do these executives continue to get incredible salaries when they demonstrably do nothing for the company?"

      The issue is that they're being paid as if they're founders when, in fact, they're simply running a ship that someone else built and set out to sea. It's not the same job and nowhere near as difficult. Jobs took a company that was nearly bankrupt and turned it into the world's most valuable company. Unless Cook seriously steps up his game he either needs to be paid $100K/year for the job he's doing or replaced. If he's not replaced soon, Apple will likely be irreparably harmed.

      • Tim Cook has made demonstrably more money for Apple than Steve Jobs technically did. Now a lot of that is carrying on momentum, but Cook isn't exactly driving the company into a ditch. He's been CEO of Apple for more than 5 years, and those have been 5 really exemplary years. Look over the last 5 years of product releases and see how much great stuff has come out of them.

        When you take the long view, years like this aren't actually terribly relevant. Whether Apple continues to innovate and make big things is

    • The question that never seems to get asked is: Why do these executives get these incredible salaries? Does anybody - apart from the tiny elite at the top - really think it is good value for money?

      Well, it Tim Cook's case, IIRC, he was the supply chain master for Apple. He was the one that worked out all the deals so that the original iPhones had all the parts they needed while other companies trying to mimic it had to deal with non-ideal parts because he had tied up all production of the ideal parts. He worked on the vertical integration for Apple and, while not all that showy, no doubt made lots of money for Apple. He is presumably still doing this.

    • It has to do with how much it costs to replace them. Fast food workers are paid little since they can be replaced with anyone off the street. Despite what us plebes might think, the same doesn't hold true for people at the CEO level. Thus their outrageous salaries.

    • by jsepeta ( 412566 )

      Any salary over $1M is more than a person needs to live in a year, and is the failure of the board of directors to focus on making the company more profitable.

  • He went to making more money than God down to more money than God, just a little less. Good grief. Who really needs to make 7 figures? /me ducks
  • by sjbe ( 173966 ) on Friday January 06, 2017 @10:36AM (#53617077)

    Apple last year faced declining revenue as it grappled with the first prolonged slump in iPhone sales.

    Not really shocking. The iPhone 7 is barely different from the iPhone 6. They gave users no reason to upgrade. They've basically ignored the Macintosh line for several years now. They haven't done anything particularly novel or interesting in their iPad line in quite a while. They introduced the Apple Pencil but didn't really commit to building the software to make it useful or give users a way to store it in/with the device between uses. I hate to say it but the Microsoft Surface line has been a lot more innovative recently. The Apple Watch was always going to be a niche product at best and they haven't done anything interesting with Apple TV.

    Apple hasn't released anything new or noteworthy so why should their revenue be expected to go up. Their products are still good but they really need to push the envelope a bit more if they want to maintain their current gaudy profit margins.

    • by Guspaz ( 556486 )

      The rumour on the iPhone 7 is that they had intended for a more substantial redesign. A move to OLED, the removal of the home button, touch ID directly on the screen instead of a separate button, etc. They wanted to turn the entire front of the phone into a big display. Unfortunately, things weren't ready, so the iPhone 7 was their fallback plan.

    • The 7 is demonstrably better in every single metric than both the iPhone 6 or 6s. The processor isn't just a little bit faster, it's a lot faster. It's not just faster, it's more efficient per clock cycle. Meanwhile, it has twice the storage regardless of selected tier, gets the same battery life, unlocks faster and has a better camera. The outer casing on the jet black models may scratch more easily, but it's grippier, so you're less likely to drop it without a case.

      The only thing that you might be able to

  • Poor guy! (Score:5, Funny)

    by Opportunist ( 166417 ) on Friday January 06, 2017 @10:36AM (#53617081)

    Only 8 millions! How will he possibly survive?

    Folks, let's start a Patreon for him, we cannot let him starve.

    • It gets even better. Contrary to the headline, 2016 was actually his highest-paid year yet. Yes, his base salary was lower, but the reporting over at MacRumors [macrumors.com] mentions this tidbit (emphasis mine):

      While Cook earned roughly $1.5 million less from his base salary and non-equity incentives in 2016, it was also the year in which he reached five years as CEO and unlocked nearly $137 million in previously-awarded stock bonuses tied to both his tenure and Apple's performance under his leadership. Accordingly, Cook earned roughly $145 million last year, his biggest payout yet as head of the company.

      In other words, while he didn't receive $1.5 million on account of missing the goals for 2016, he still received additional compensation worth $137 million for hitting the 5-year goals they set when he began as CEO, so the poor guy shouldn't starve anytime soon.

    • Only 8 millions! How will he possibly survive?

      You laugh, but is he married? Believe me, if he made 10 million last year, she's going to spend 10 million this year, whether he brings in all 10 of those million or not.

  • by beheaderaswp ( 549877 ) * on Friday January 06, 2017 @10:38AM (#53617099)

    Let's face it... it's not as if replacing Jobs was going to be an easy task- it may have been impossible.

    That being said, Apple is not living up to the standard Jobs set. Maybe that's Cook's fault... maybe not. The recent products are lame. They've eviscerated their computer business. So if new products don't hit... it's not like they can fall back on the unfulfilled promise of OSX. They've been so successful with new consumer innovations, they've tossed away all the vertical markets they used to rule.

    This is a dangerous position. They shouldn't cut his pay- they should fire him and find someone to take over.

    • by Joe_Dragon ( 2206452 ) on Friday January 06, 2017 @10:44AM (#53617173)

      Have WOZ come back and make good macs that pro users, gamers, etc can use.

      • by e r ( 2847683 )
        Woz was a great engineer, but Apple doesn't make their name through great engineering.
        Apple's products sell because they're sleek and stylish and handy and their competitors' products weren't.
        That's why and how Jobs brought success to Apple in the midst of a crowded field.
        Apple is losing revenue because the fad for their iconic industrial design is fading and also because their competitors are now putting out sleek and stylish designs of their own.
        Bringing back Woz won't change that. Woz would probably
        • > Woz was a great engineer,

          Which highlights another tragedy of business. Behind every great company that has massive success and beloved products, you'll find a cadre of engineers that actually created the products who get paid relative peanuts compared to the suits.

          • by e r ( 2847683 )
            Deciding whether to sail and where to sail to is important.
            If the ship doesn't sail or if it sails to a poor location at which the ship's company can't make money then why have the ship?
            Thus the captain's job is very important and he should be paid according to the profit that his merchant ship makes.
            The sailors are important as well-- they're the ones who literally sail the ship after all. But each individual sailor isn't critical-- there are many sailors who can all do the same job.
            But there's only on
        • Apple was also big in the media market for pro use and they had good workstations as well the cool looking imac's. But with the mac pro and other systems (mini) (imac getting very thin) they went away from at least having the big tower for the pro market. The imac is to thin and have to deal with laptop level cpu's and video cards.

          The mini went from having an quad core with 2 hdd's server system only has 1 HDD and dual core.

        • Woz was a great engineer, but Apple doesn't make their name through great engineering.

          They did for quite a while, they brought in the whole team from Next who wrote solid software from the ground up. Every release was a clear improvement over its predecessor. Their actual engineering was good too: coming up with the unibody frame for the laptop, for example. The Macbook air was years ahead of the competition in form factor (although others are finally catching up).

          Back around 2010 I started noticing a decline in quality of the lower level APIs and such. I suppose a bunch of old Next guys

    • by Anonymous Coward on Friday January 06, 2017 @10:48AM (#53617199)

      Problem was always that Jobs was a "visionary" who could direct the design process of the hardware and software while Cook was a numbers man whose expertise is the bottom line. When you want a new tech product you don't ask your accountant but this is essentially what is happening at Apple

    • I never understood why Jobs recommended Cook. Cook was a process guy who came from Compaq for crying out loud. Maybe he simply didn't care at that point?

      Job always railed against sales, marketing and accounting people running things, especially in his lost then found interview. https://www.youtube.com/watch?... [youtube.com]
      • Maybe he wanted Cook to push the rest of his stuff out to market and another idea person might not have done that. A numbers guy will keep the ship steady on course. The problem is that Cook has been there for too long and it appears that innovation has stagnated. So they are buying companies and plastering Apples interface over their work. And the biggest problem is that Apple is concentrating on the big, shiny new thing and letting everything else go.

        Apple desperately needs someone to come in and get

    • they should fire him and find someone to take over.

      Do you think you could find someone better than Tim Cook to do the job?
      I don't think I could.

  • by Anonymous Coward on Friday January 06, 2017 @10:38AM (#53617105)

    I can remember sitting outside in 2007 waiting for the store to open and start selling the original iPhone. It was hot in the mid-summer sun sitting on that hard concrete, but it was worth it to upgrade from the aging PalmOS. It wasn't perfect, but I loved it. I ended up buying the latest one every year since just to have the fastest version of my favorite phone. That lasted until 2016.

    Of 10 friends (and their spouses), virtually no one has upgraded to an iPhone 7. Half upgraded to a larger storage capacity iPhone 6S intending to keep it for another year or more. The rest have considered Android, but haven't made a purchase. Losing the headphone jack has been a major problem. If it isn't connecting it to your older car with 3.5", but no Bluetooth, it is connecting it to headphones or something else we already own.

    Hopefully Apple will be brave enough to put the headphone jack back in. I can't see using a phone without one. I'm apparently not the only one.

    • by labnet ( 457441 )

      Yep. I bought an oppo F1 as a temporary phone Between my iPhone 4 In anticipation of the the new iPhone 7. In the mean time, the oppo at 1/3 the price has done everything I've needed it to do + no headphone jack on the 7 = no sale for me. The transition off the apple Eco system wasn't as painful as I thought.

  • by sandbagger ( 654585 ) on Friday January 06, 2017 @10:38AM (#53617113)

    I am sure that some PR dolt is telling Apple that they really get to the public to understand their message. However, it seems clear that the sustained and pretty narrow criticism that their non-phone hardware is crappy is not a marginal opinion. They simplified their line into a 'use old laptop parts for everything' which may make sense from the perspective of simplifying their parts bin but not for much else.

    This does mean they have a lot of options for correcting this tailspin. It may be selfish, but from my perspective I want a data truck. Give me a Mac Pro tower.

  • by vux984 ( 928602 ) on Friday January 06, 2017 @10:53AM (#53617283)

    Getting a pay cut isn't going to motivate him. He clearly isn't bringing his A game... he needs to be incentivized; perhaps a more aggressive bonus structure, or more stock options? Maybe he needs a big raise? You need to do this to attract and retain talent! /sarcasm

  • I hope he stays afloat.

  • by DougReed ( 102865 ) on Friday January 06, 2017 @11:20AM (#53617551)

    Tim Cook is a stupid bean counter, and Jony Ive is destroying Apple with his ego. The lost their Consumer Reports recommendation for the first time. Their machines are becoming dreadful.

  • Reporter: We caught up briefly with Tim as he getting off a crowded transit bus. We asked, "Now that you've lot all that money, what adjustments are you going to have to make?"

    Tim: "Obviously we're eating out less, driving less, more walking, fewer movies. On the plus side, we're enjoying more interaction with our neighbors at outdoor barbeques and spaghetti nights. Community is the key."
  • 4% decline in sales? (Score:2, Interesting)

    by Anonymous Coward

    This is the effect of them neglecting their impoverished desktops and laptops line-ups. I hate them for having me to use 6.5 year old MBP laptop with no suitable PC/Win equivalent in the last few years. I want Apple power laptop, not a shiny-encrusted chicken shit tablet calculator worth €3333.

  • by LeftCoastThinker ( 4697521 ) on Friday January 06, 2017 @01:53PM (#53618679)

    Fire his ass and get a leader with vision. The iPhone is slumped because there is nothing to drive sales. NO ONE WANTS A THIN PHONE if it means poor battery life and a weak frame that can bend during normal use. Give me more features like an IR camera, night vision camera, an internal LED projector, plug in keyboard and screen for desktop functionality, stereoscopic cameras for 3D pictures, a waterproof design, a much tougher screen (this is not even that hard, you basically just make your screen plastic with a top replaceable layer. When the layer gets scratched, you replace it. The plastic screen will not shatter, and the top layer protects the main screen from scratches.)

    There is still a lot of potential for smart phones; Apple used to be innovating, now they are coasting on their trendy consumer base, but that will push them back to a 5% market share.

    • Apple hasn't innovated in years. Tim Cook is a coattail CEO. Once sales slump enough investors will oust him.
    • > NO ONE WANTS A THIN PHONE

      hundreds of millions of people want a thin phone

      > if it means poor battery life

      the iPhone doesn't have poor battery life, it has really good battery life for the usage patters of the vast majority of customers

      > and a weak frame that can bend during normal use

      This is not a real problem.

      ---

      I agree that Apple needs to give people better reasons to upgrade their phone, they're clearly out of ideas and are squarely into incrementalism.

  • Historically there's been two types of Apple CEO - Steve Jobs and everyone else. Tim Cook is definitely in the latter category.

    Jobs believed in delighting the customer ('insanely great" products). He produced products for the professional (developer and graphic arts) markets, not because they were immensely profitable, but because he realized these people led by example and influenced their companies and others to buy.

    Tim Cook had the "courage" to remove a headphone jack. Apple will coast on their cash rese

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