Apple Inc. Chief Executive Officer Tim Cook received a 74 percent increase in his annual bonus for fiscal 2017 as the iPhone maker posted higher revenue and net income, after a rare decline a year earlier.
Cook’s incentive pay totaled $9.33 million for the year ended Sept. 30, the Cupertino, California-based company said Wednesday in a regulatory filing. He also took home $3.06 million in salary and a previously disclosed equity award of $89.2 million, bringing his total payout for the year to about $102 million.
Apple CEO Tim Cook will now fly on private aircraft even for personal travel for "security and safety reasons", a regulatory filing with the SEC reveals. Separately, his received a massive increase in his annual bonus, thanks to earnings rebound for the company.
According to a new shareholder proxy statement from Apple, the board of directors has approved that Cook must fly on private aircraft whenever he travels, be it for business or personal purpose.
"This policy was implemented in 2017 in the interests of security and efficiency based on our global profile and the highly visible nature of Cook's role as CEO," Apple said in the shareholder proxy statement filed late on Wednesday. "Any time Cook uses an Apple private jet for personal travel, the costs are considered extra compensation, on which he will have to pay taxes," the statement further said.
His top five lieutenants each got bonuses of $3.11 million, bringing their total compensation to about $24.2 million each, including salaries and stock awards. The equity compensation is composed of shares that vest solely based on the executives’ continued employment and others tied to the performance of Apple’s stock compared with other S&P 500 companies.
Apple has increased the proportion of performance shares in its equity awards, which boosts potential future earnings for the executives if the company outperforms its S&P 500 peers. History suggests that could be a good deal for them.
In 2014, executives including Dan Riccio, chief of hardware engineering, and former General Counsel Bruce Sewell received performance awards that paid out three years later at almost twice as many target shares as planned after Apple’s stock returned 69 percent over that span, including reinvested dividends. In August, Cook collected 560,000 shares when part of his 2011 mega-award vested because Apple outshined more than two-thirds of the S&P 500 over three years.
For the first time, Cook ran up a $93,109 bill for traveling on private aircraft on non-business-related trips. The Apple board stipulated this year that for security reasons the CEO should use private planes for business and personal travel, citing the risk given his high profile. Personal security costs were calculated at $224,216.
Apple shares returned 39 percent in fiscal 2017, more than double that of the S&P 500. In November, shortly after the start of the current fiscal year, the company released iPhone X, a long-awaited upgrade to its flagship product. Analysts said they expect the new handset to help accelerate revenue growth.
Cash bonuses for the executives paid out above their target as the company beat net sales and operating income goals.
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