Yahoo Finance How Much Does Apple's (NASDAQ:AAPL) CEO Make?
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Tim Cook has been the CEO of Apple Inc. (NASDAQ:AAPL) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out 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$1.7t, and paid its CEO total annual compensation worth US$12m over the year to September 2019. We note that's a decrease of 26% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$3.0m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$10m. So it looks like Apple compensates Tim Cook in line with the median for the industry. Furthermore, Tim Cook directly owns US$329m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$3.0m | US$3.0m | 26% |
Other | US$8.6m | US$13m | 74% |
Total Compensation | US$12m | US$16m | 100% |
On an industry level, roughly 10% of total compensation represents salary and 90% is other remuneration. Apple pays out 26% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Apple Inc.'s Growth
Over the past three years, Apple Inc. has seen its earnings per share (EPS) grow by 14% per year. It achieved revenue growth of 3.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Apple Inc. Been A Good Investment?
Boasting a total shareholder return of 170% 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.
To Conclude...
As we touched on above, Apple Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Apple that investors should be aware of in a dynamic business environment.
Switching gears from Apple, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
This article by Simply Wall St is general in nature. 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.
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