Cook trounces Nadella in 2014 tech pay package tussle

Apple CEO has already received $146M in stock awards this year

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Although the $84.3 million pay package of Microsoft's CEO made news Monday, Apple's chief executive, Tim Cook, has already blown by his rival in compensation for the year.

According to documents filed with the U.S. Securities and Exchange Commission (SEC) in August and September, Cook received 1.43 million shares due him from grants awarded in 2010 and 2011.

On the dates Cook received those shares, they were worth just over $146 million. That value represented 73% more than Microsoft's Satya Nadella was awarded for his 2014 compensation package, a collection that included $59 million in stock grants that he won't start receiving until 2019.

The difference wasn't surprising: While Nadella has led Microsoft only since Feb. 4, Cook has run Apple since August 2011, and had run the company for extended periods when former CEO Steve Jobs took medical leave.

The shares Cook drew in August were from a pair of awards given him in 2010, including a pre-split 75,000-share allocation for what Apple called an "outstanding performance" while filling in for then-CEO Steve Jobs, who was absent for six months in 2009 for a liver transplant. After Apple's June 7-for-1 stock split, the 2010 awards' 125,000 shares became 875,000 shares.

Cook's September shares were part of the massive grant of 1 million shares he received when he became chief executive in 2011, just weeks before Jobs' death.

At the time, those shares were to vest in equal parts in August 2016 and August 2021 as long as Cook was still employed at Apple. But two years later Cook asked the board to change the schedule from two monster handouts to a timetable where the shares would be spread out over a 10-year period and be tied to the company's stock performance.

Cook is guaranteed to receive half of the shares owed him each year; the other half may be reduced or eliminated if Apple's "total shareholder return" (TSR) falls into the bottom two-thirds of the S&P 500 for the year.

Before the split, Cook was to receive a maximum of 80,000 shares annually; after the split, the number jumped to 560,000. By the terms of the revised vesting agreement, Cook got all 560,000 shares this year because Apple's TSR was in the top third of the S&P 500's standings. Apple has not disclosed where its TSR ranked.

TSR is a combination of share price appreciation and dividends paid to shareholders.

Of the $146 million in shares, Apple withheld over half -- almost $76 million -- for tax purposes. Cook sold another $35 million, with the proceeds placed in a trust. The remaining 339,166 shares, worth approximately $34 million at Tuesday's opening price, were also allocated to the trust.

Cook's 2013 salary was $1.4 million, and he received a bonus of $2.8 million last year. Changes in either won't be disclosed until Apple issues its preliminary proxy statement in late December.

Copyright © 2014 IDG Communications, Inc.

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