Tim Cook's 2015 pay package climbs 12% to $10.3M

Apple's chief exec also gets a 50% raise in base salary for 2016, to $3M

Apple CEO Tim Cook
Blair Hanley Frank

Apple CEO Tim Cook's 2015 compensation reached nearly $10.3 million, up 12% from the year before, a filing Wednesday with the U.S. Securities and Exchange Commission (SEC) showed.

In the filing, Apple also said Cook's base salary had been increased by 50% for 2016, climbing from $2 million to $3 million for the current fiscal year.

As was the case in 2014, Cook's compensation last year was considerably lower than the lieutenants named in the preliminary proxy statement submitted to the SEC yesterday. Those executives -- CFO Luca Maestri, head of retail and online sales Angela Ahrendts, leader of the Internet software and services group Eddy Cue, chief of hardware engineering Dan Riccio, and general counsel Bruce Sewell -- made between $24.4 million and $25.8 million each, largely on the backs of $20 million stock awards during the year.

Cook, however, also gained control of large numbers of Apple stock shares during 2015 as part of a prior award vested. In August, 560,000 shares vested for Cook, the year's allotment of the massive 1 million-share grant he was handed in 2011 when he took the CEO job just weeks before co-founder Steve Jobs' death. Three years later, the 1 million became 7 million when Apple's stock split 7 for 1. Those shares were worth approximately $57.7 million.

Apple's CEO has nearly 4.8 million shares still to vest, with a value -- based on Wednesday's closing price -- of about $480 million. One million, two hundred and sixty thousand of those shares (worth approximately $127 million at yesterday's bell price) are slated to vest in August 2016, assuming Apple meets market performance targets. Apple uses a metric called "total shareholder return" (TSR), a combination of share price appreciation and dividends paid to shareholders, to measure executive performance. For 2015, Apple's TSR was in the top 10% of the S&P 500, as it was the year before.

During 2015, Cook received $2 million in salary, $8 million in a cash bonus and $281,000 for sundry expenses, including Apple's contribution to his 401(k) plan, company-paid life insurance, $54,000 for vacation time converted to cash and $209,000 for security expenses.

That last amount was considerably less than the $700,000 recorded for Cook's personal security in 2014, the first year the expense showed up in an Apple filing. "We do not consider these security measures to be a personal benefit for Mr. Cook, but rather a reasonable and necessary expense for the benefit of Apple," the company said in the proxy statement.

For fiscal 2015, as for the year before, Cook and the others named in the filing received the maximum cash bonus allowed: 400% of each executive's base salary. According to Apple, the company's net sales and operating income growth easily exceeded the targets set by the board, triggering the bonuses.

Cook received $8 million in the form of a cash bonus, while Ahrendts, Cue, Maestri, Riccio and Sewell received $4 million each.

Cook's $1 million raise was awarded, Apple said, "In recognition of [his] individual performance and remarkable leadership," and went into effect at the beginning of 2016. The salary boost also meant that Cook could earn a cash bonus of up to $12 million for the current fiscal year.

The proxy statement was issued in preparation for the upcoming stockholders' meeting, which will be held February 26 on Apple's campus. The eight current board members -- who include Cook, former Vice President Al Gore and Bob Iger, the chairman and CEO of the Walt Disney Co. -- are all up for re-election.

Copyright © 2016 IDG Communications, Inc.

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