Tim Cook made $378 million in 2011, more than any CEO in all of America and a little of it had anything to do with his performance. In the Wall Street Journal's annual ranking, Cook leads the second-highest paid chief by about $300 million, with Oracle's CEO Larry Ellison coming in at $76.01 million. Most of Cook's compensation, however, does not come from his salary. That only (only?) brings him $900,000 a year. Most of it comes in the form of stock options, for a stock that his predecessor built.
As part of the compensation package granted last August, Cook received one million shares of restricted stock which are worth $376.2 million. Right now that stock price is north of $550, giving Apple the highest market cap on the whole stock market. Apple is worth a lot, so Cook is worth a lot. Since Cook took over last Summer, Apple's stock has only gotten more valuable. But how much of that has anything to do with Cook?
Since the CEO took over Apple has released two products, which have pushed its stock beyond Mobile Exxon as the MVP of the market: The iPhone 4S and the new iPad. Both of those products, with few radical changes, were continuations of the Steve Jobs legacy. Both had record sales, and Apple's stock continued to rise. Cook did have to deal with increasing competition from new devices, like the lower-priced Kindle Fire, which he handled well with statements like the following from the January earnings call: "In terms of the competetive ecosystem, the iPad is in a class all by itself." He added, "Limited-function tablets ... they'll sell a fair number of units...but I don't think people who want an iPad will settle." And while Amazon said Kindle Fire sales did well when it first released the tablet, March numbers showed a Kindle Fire slump. At the end of last year, the Kindle Fire got 17 percent of the tablet market, compared to Apple's 55 percent, reported The Wall Street Journal. By the beginning of this year, however, Amazon only grabbed 4 percent of that market, compared with Apple's 68%.
Cook really earned his hundreds of millions with his performance during the Foxconn scandal. Apple, as we've noted before, has emerged from its PR mess looking as good as possible. Cook made few statements, without getting defensive. And unlike Jobs, he visited the place where his money-makers are made, getting perfect smiley photos with Foxconn workers. As Apple acted as the face of Foxconn's worker issues, from January through March, when Mike Daisey was outed, the stock only continued to rise. For that, we can give Tim Cook (and Apple's PR department) all the credit.
Even if Cook got a little lucky this year, riding off of Jobs' fame. To really make his big-bucks, he'll have to prove he can continue the legacy. The way the restricted stocks work, Cook can't sell half the shares before 2016 and the other half before 2021. And Apple doesn't plan on adding anything more onto Cook's compensation, saying in a proxy statement these shares are his paycheck for the next 10 years.
This article is from the archive of our partner The Wire.
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