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Apple Executives and Directors Required to Hold 3x - 10x Base Salary in AAPL Stock

Apple has changed its corporate bylaws [PDF] to require executives officers to hold three times their annual base salary in stock, with Non-Employee Directors holding five times their annual retainer and Tim Cook required to hold ten times his annual base salary in stock.

The requirement for executives went into effect February 6th, while the requirement for Cook and the Directors went into effect back in November.

From The Wall Street Journal:
Calpers discussed the new executive-ownership requirement with the Apple board before the meeting, according to Anne Simpson, head of corporate governance for Calpers, who declined to elaborate. The fund has long regarded executive stock ownership "as standard good practice," she said. "It's part of our conversation with all companies we engage." Ms. Simpson said in an interview Wednesday that "there are other changes in the works related to executive pay."
Proposal No. 5, an item that was voted on at the recent Apple Shareholder's Meeting, would have required executives to hold 33 percent of their equity pay until retirement. Apple felt this requirement was too onerous and instead adopted stockholding requirements relating to base yearly salary.

The base salaries of most senior executives will be $875,000 for 2013, while Tim Cook's salary will be $1.4 million this year. Non-employee board members receive a $50,000 yearly retainer.

Top Rated Comments

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21 months ago

So if Steve Jobs was still here, his $1 salary would mean....


I really think you need to move on, let Steve go buddy. We have Tim and Jonny and the team now. I know bereavement is tough. However you got to let it go.
Rating: 41 Votes
21 months ago
So if Steve Jobs was still here, his $1 salary would mean....
Rating: 16 Votes
21 months ago
1.4 mil doesn't sound like much.
Rating: 8 Votes
21 months ago

It's also 40 times the average retail store employee's salary and 245 times the average salary of somebody assembling the products.

It's all relative.


From my experience, the consequences of his decisions merits at least 40x that of any retail employee.
Rating: 7 Votes
21 months ago

I really think you need to move on, let Steve go buddy. We have Tim and Jonny and the team now. I know bereavement is tough. However you got to let it go.


Pretty sure it was a joke. Don't know how that qualifies as bereavement.
Rating: 7 Votes
21 months ago
It still amazes me how much some people make.
Rating: 5 Votes
21 months ago
Good to see. More companies should take this approach. I've always felt that the higher up the food chain you are, the more your compensation should be based on company performance. For CEOs it should be 75% to 90% of the total package. Company takes a loss for the year, then your pay goes way down. Companies that pay executives bonuses when they lose money should be driven out of business.
Rating: 5 Votes
21 months ago

It's also 40 times the average retail store employee's salary and 245 times the average salary of somebody assembling the products.

It's all relative.


And also 1/48th of Ralph Lauren's. It's tiny in comparison to other CEO's of major corporations.
Rating: 4 Votes
21 months ago

This is a stupid policy. Executives at a company like Apple already have their salaries, bonuses, stock-based compensation, and their individual reputations all tied to how well their company does. You'd think those factors alone would be sufficient for managers to take a rooting interest in the company's future.

It's just foolish to not diversify enough so that a court case, an accident, or the CEO's picture on the front page with an altar boy and a sheep doesn't take you from riches to rags overnight. We've seen stock prices plummet for all sort of reasons that have little or nothing to do with the performance of managers, and certainly not with the performance of every manager.

Whether it's a money-center bank, a Fortune 50 company, or some pink sheet outfit, there is always some idiot who thinks it's a demonstration of loyalty and dedication if you tie yourself to the mast. My view is that any executive foolish enough to wager everything his family has on the financial future of a single company is too foolish to be trusted with a responsible role in corporate management or direction.

Nor should we neglect the wisdom of those who have recognized that a short-term focus on stock price can lead to lousy decisions, or overlook the fact that a senior manager or board member who is set for life with company stock at its then current value is very likely to be more reluctant to support bold initiatives that present some risk than an objective decision-maker ought to be.

I thought Apple was better than this.


Uhhh, Tim Cook was paid $378,000,000 in 2011 alone. You really think saying "hey, you need to have $14,000,000 in stock" is wagering everything his family has????
Rating: 3 Votes
21 months ago

http://www.forbes.com/lists/2012/12/ceo-compensation-12_rank.html

In 2012 Cook was 107 on this list with a salary of $900,000.


You are comparing Ralph Lauren's total compensation (salary, bonus, stock, options, dividends) to Tim Cook's salary alone. Tim Cook made $378 million in stock awards alone in 2011.

That's the only way to look at it.

Either that or "how did Steve Jobs afford that yacht? He only made $1 a year?"
Rating: 3 Votes

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