Techworld

Apple CEO Tim Cook could pocket $115M in 2014

But compared to Microsoft's Ballmer and Google's Schmidt, Cook has one foot in the poorhouse

Although Apple CEO Tim Cook's 2013 salary raise was less than half the 7.5% increase given to his subordinates, he stands to rake in as much as $115 million in 2014.

According to a proxy filing with the U.S. Securities and Exchange Commission (SEC), Cook is slated to receive up to 205,000 shares of stock in August and September 2014.

At Friday's closing price, those shares would be worth $114.8 million. Their actual value will be determined by the share price on the day they "vest," or are placed in Cook's control. Depending on Apple's stock performance between now and then, their value could be much more or considerably less.

A majority of the shares -- 125,000 -- will come from a grant given Cook three years ago, and will vest Sept. 21, 2014. That award was Cook's second of 2010. In March that year, Cook received a $5 million cash bonus and 75,000 shares of stock for what Apple called an "outstanding performance" while filling in for then-CEO Steve Jobs, who took a six-month medical leave in 2009.

Jobs underwent a liver transplant while he was away from Apple. Cook ran Apple in his absence then, and again in 2011 when Jobs left the company a second time.

Jobs died on Oct. 5, 2011, just over a month after he resigned as CEO. The board of directors took Jobs' advice and appointed Cook as his replacement.

The remaining 80,000 shares that Cook may obtain next year will be part of the massive grant of 1 million shares he received when he took the CEO chair. At the time, those shares were to vest in equal parts in August 2016 and August 2021.

But in June, Apple's board revised the vesting schedule at Cook's urging. Rather than take the two large stock handouts, Cook asked that vesting occur annually over a 10-year period, with the amounts partly tied to the company's performance on Wall Street.

Because of the latter, Cook is guaranteed to receive only half of the 80,000 shares in 2014. The remaining 40,000 shares may be reduced or eliminated if Apple's "total shareholder return" (TSR) falls into the bottom two-thirds of the S&P 500 for the year.

Under the revised vesting process, Cook forfeited 7,123 shares in 2013, which would have represented almost $4 million at last week's price if they had been awarded.

In the same proxy statement, Apple said that as of Dec. 26, Cook owned approximately 87,000 shares, worth about $49 million at the current price. Two members of the board, chairman Arthur Levinson and former Vice President Al Gore, controlled more shares than Cook, with their holdings valued at $134 million and $57 million, respectively.

During 2013, Cook sold more than 79,000 shares and pocketed $36 million before taxes from the three transactions.

But compared with other non-founder CEOs, including those at a pair of Apple rivals, Cook is a pauper.

As of Sept. 13, Microsoft's Steve Ballmer owned nearly 4% of all outstanding shares of the Redmond, Wash. company. At Friday's price, Ballmer's holdings were worth $12.4 billion. And on April 4, the date of Google's last proxy filing, Eric Schmidt, now the company's chairman but its CEO from 2001 to 2011, owned more than 6.8 million shares, valued Friday at $8.1 billion.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about macintosh in Computerworld's Macintosh Topic Center.

More about: Apple, Apple., Google, Microsoft, SEC, Securities and Exchange Commission, Topic, TSR, Wall Street
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