Advertisement
Australia markets open in 9 hours 43 minutes
  • ALL ORDS

    7,817.40
    -81.50 (-1.03%)
     
  • AUD/USD

    0.6421
    -0.0004 (-0.07%)
     
  • ASX 200

    7,567.30
    -74.80 (-0.98%)
     
  • OIL

    83.24
    +0.51 (+0.62%)
     
  • GOLD

    2,406.70
    +8.70 (+0.36%)
     
  • Bitcoin AUD

    101,330.80
    +1,763.58 (+1.77%)
     
  • CMC Crypto 200

    1,342.09
    +29.47 (+2.25%)
     

Increases to CEO Compensation Might Be Put On Hold For Now at Apple Inc. (NASDAQ:AAPL)

Key Insights

  • Apple to hold its Annual General Meeting on 28th of February

  • CEO Tim Cook's total compensation includes salary of US$3.00m

  • Total compensation is 458% above industry average

  • Apple's EPS grew by 21% over the past three years while total shareholder return over the past three years was 48%

Under the guidance of CEO Tim Cook, Apple Inc. (NASDAQ:AAPL) has performed reasonably well recently. As shareholders go into the upcoming AGM on 28th of February, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Apple

Comparing Apple Inc.'s CEO Compensation With The Industry

According to our data, Apple Inc. has a market capitalization of US$2.8t, and paid its CEO total annual compensation worth US$63m over the year to September 2023. Notably, that's a decrease of 36% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$3.0m.

ADVERTISEMENT

In comparison with other companies in the American Tech industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$11m. Hence, we can conclude that Tim Cook is remunerated higher than the industry median. Moreover, Tim Cook also holds US$598m worth of Apple stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2023

2022

Proportion (2023)

Salary

US$3.0m

US$3.0m

5%

Other

US$60m

US$96m

95%

Total Compensation

US$63m

US$99m

100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Apple has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Apple Inc.'s Growth Numbers

Apple Inc.'s earnings per share (EPS) grew 21% per year over the last three years. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Apple Inc. Been A Good Investment?

Boasting a total shareholder return of 48% over three years, Apple Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Apple prefers rewarding its CEO through non-salary benefits. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Apple that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.