Apple Inc. (NASDAQ: AAPL) has issued its proxy for its most recently completed fiscal year. The DEF 14 A, as the U.S. Securities and Exchange Commission labels it, includes payments to Apple’s top five executives. Tim Cook, the chief executive officer, made $14.8 million for a year in which Apple did not post huge growth but did have critical product launches.
Of Cook’s pay, $3 million comes from the base salary listed in his contract. He made another $10,731,000 from Apple’s Non-Equity Incentive Plan Compensation, which is a cash payment. This payment was earned because Apple exceeded the board of director’s targets for net sales and operating income. Cook made another $1,038,259 for what is listed as “All other compensation.” The two largest components were $470,246 for personal security and $432,564 for the personal use of private aircraft. The board requires that he travels this way.
The other four executives named in the proxy made more than Cook. Luca Maestri, senior vice president and chief financial officer, made $26,253,270. Kate Adams, senior vice president, general counsel and secretary, made $26,248,995. Deirdre O’Brien, senior vice president of Retail + People, made $26,272,371, and Jeff Williams, chief operating officer, made $26,251,824.
Each of Apple’s six independent directors made over $300,000. The board’s chair, Art Levinson, made $578,145. Al Gore made $358,321. James Bell made $359,102. Andrea Jung made $402,205. Ron Sugar made $398,627. And Sue Wagner made $375,147.
Apple had three shareholders that owned over 5% of the company’s shares. Investment firm Vanguard Group owned 7.83% of common shares. Investment firm BlackRock owned 6.60%. Warren Buffett’s Berkshire Hathaway owned 5.96%.
Cook orchestrated a year in which Apple’s revenue reached $274.5 billion, up from $260.1 billion the year before. Net income reached $57.4 billion, up from $55.3 billion.
Key to Cook’s success, Apple iPhone sales barely held their own ahead of the launch of the iPhone 12. iPhone revenue hit $137.8 billion, down from $142.3 billion. However, revenue from Apple’s critical Services segment soared. This includes the Apple App Store, Apple Music, Apple Pay and Apple’s TV. Revenue for the segment hit $53.8 billion, which was up from $46.3 billion. Services has emerged as the business that glues Apple’s worldwide device business together. It offers Apple’s customers features for their devices that are largely unique to Apple. Management calls this an “ecosystem” that has been created to keep Apple customers loyal and make them likely repeat buyers of iPhones, Macs, iPads and new products like the Apple Watch.
Cook now has run Apple for close to a decade. He has successfully built on the foundation set by co-founder and long-time CEO Steve Jobs. Apple is the most valuable company in the world, based on its market capitalization of $2.24 trillion. Given those things, $14.8 million for Cook is inexpensive.