Apple Gives Cook 22% Raise -- WSJ
09 Gennaio 2019 - 9:02AM
Dow Jones News
By Tripp Mickle
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 9, 2019).
Apple Inc. rewarded Chief Executive Tim Cook and other top
executives with a big boost in compensation for fiscal 2018, when
the iPhone maker blew past annual sales and profit goals but faced
slowing momentum for its most popular device.
Mr. Cook's total compensation for the year ended in September
rose 22% to $15.7 million, according to a security filing Tuesday.
It marked the second consecutive year his pay increased, and was
driven by a $12 million cash bonus that hinged on Apple exceeding
financial targets set by the board.
The award was revealed a week after Mr. Cook issued a letter to
shareholders saying Apple would miss revenue estimates for the
three months ended in December, marking the first time in more than
15 years the company had slashed its quarterly revenue guidance.
Apple said a decline in iPhone sales, particularly in China, had
hurt results.
Revenue soared to a record last year after Apple raised the
price of its flagship iPhone by 50% to nearly $1,000. That move
helped lift iPhone sales 18% to $166.7 billion, even as the number
of devices it sold was flat with the prior year. It also delivered
another year of strong growth in services such as app-store sales,
streaming-music subscriptions and mobile payments, a business that
jumped 24% to $37.19 billion.
Apple rode those gains to become in August the first U.S. public
company to be valued at more than $1 trillion.
Revenue for fiscal 2018 totaled $265.6 billion, while operating
income hit $70.9 billion, exceeding Apple's maximum targets of $264
billion for sales and $70 billion for operating income. Those
targets represented about a 15% increase from the prior year's
results.
The median annual pay of Apple employees was $55,426. That is
far below the $240,430 at Facebook Inc. and $197,000 at Alphabet
Inc. Like Amazon.com Inc., which reported median annual pay of
roughly $30,000 because of its vast number of warehouse employees,
Apple's median pay is suppressed by a huge workforce that staffs
its retail stores.
Mr. Cook's pay of $15.7 million was about 283 times the median
Apple employee's pay.
Apple scheduled its annual meeting for March 1 at its Cupertino,
Calif., headquarters.
Though Apple reported record revenue and profit Nov. 1, its
shares have tumbled more than 30% since, shedding more than $400
billion in market value, because of rising concern among investors
about sales of its latest iPhones. Apple ceded its position as the
world's most valuable publicly listed company, ending a nearly
seven-year run.
Apple said in November it would stop reporting the number of
iPhones sold, which many analysts interpreted as a signal the
device's years of unit growth are over. Last week, Mr. Cook said
revenue for the fiscal first quarter would come in around $84
billion, at least $5 billion shy of the company's previous
guidance.
Mr. Cook and Apple finance chief Luca Maestri have encouraged
investors to focus on Apple's services business, which has
delivered three consecutive years of more than 20% sales growth. To
further highlight that business, Apple will begin reporting gross
margins separately for hardware and services.
Apple has 1.4 billion iPhones and other devices in active use
and earns an estimated $30 for each device from services, according
to Morgan Stanley. The firm expects services to account for about
60% of Apple's revenue gains over the next five years. By contrast,
the iPhone accounted for 86% of sales growth in the previous
five-year period, it estimates.
However, Wall Street's enthusiasm about services potential has
cooled. Nomura Instinet analyst Jeff Kvaal said last month that the
business was "not a panacea" for slowing iPhone sales because
average revenue per user might slow as more buyers choose
refurbished, less costly devices over newer, high-priced
iPhones.
When Apple's sales last slumped in 2016, it took a bite out of
the total compensation of Mr. Cook and the rest of the executive
team. His compensation fell 15% -- all in reduced cash bonus -- as
Apple failed to meet financial goals because of a decline that year
in iPhone sales and a significant downturn in the company's China
business.
For the latest year, Apple's other highest-paid executives
received 10% increases in total compensation to about $26.5
million. Mr. Cook's annual compensation is lower than that of other
Apple executives, though he received a large restricted stock grant
in 2011.
Apple's board doesn't outline its goals for the current fiscal
year in its annual proxy statement for shareholders.
(END) Dow Jones Newswires
January 09, 2019 02:47 ET (07:47 GMT)
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