Apple CEO's 2013 pay steady but sees part of stock award shrink
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Apple CEO's 2013 pay steady but sees part of stock award shrink

Last Updated: Saturday, December 28, 2013, 09:08
 
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Apple CEO's 2013 pay steady but sees part of stock award shrink
San Francisco: Apple Inc CEO Tim Cook earned roughly the same in 2013 as in 2012, but lost part of his performance-based stock award during a year in which intense competition and margin pressure bludgeoned the iPhone maker`s stock.

Cook took home $4.25 million, including a base salary of $1.4 million and a performance bonus of $2.8 million, roughly on par with 2012, the company said in a preliminary proxy statement on Friday.

But he gave up about 7,100 shares tied to an annual performance-dependent award, based on shareholder returns from August 24 of 2012 to August 25, 2013. Apple`s stock lost a quarter of its value over that one-year period.

The company also advised shareholders to vote down a resolution by activist investor Carl Icahn, who proposed the iPhone maker buy back $50 billion worth of shares in fiscal 2014. It was the first time the company had publicly voiced its response to Icahn`s demands.Apple argued on Friday it has already returned $43 billion in dividends and share repurchases over the first six months of its roughly $100 billion capital return program.

The "dynamic competitive landscape and the company`s rapid pace of innovation require unprecedented investment, flexibility and access to resources," Apple said in advising shareholders to reject Icahn`s proposal.

Known for decades of strong-arm tactics, including proxy fights, Icahn has repeatedly made it clear that his proposal is not a sign that he stands against Apple`s management. The billionaire has discussed the issue with Cook in past months, arguing via tweets that a buyback of as much as $150 billion is within the company`s means and would prop up its stock.

STRAIN

Since taking over from the late Steve Jobs, Cook has steered Apple in a more investor-friendly direction, including the establishment of one of the industry`s biggest capital return programs.

Apple`s board in 2012 granted Cook an award of one million restricted stock units (RSUs) - one of the largest pay packages for an executive in a decade, intended to signal its confidence in Cook in the wake of the late Steve Jobs.

The award vests annually, but part of the grant depends on shareholder returns versus a basket of Apple`s corporate peers, including Cisco Systems Inc and Google Inc .

But Apple has come under increasing strain from rivals like Samsung Electronics and Huawei in key markets, while Amazon.com Inc and other manufacturers are using Google`s Android software to launch competing tablets.

Apple`s profit and margins slid in the September quarter despite selling 33.8 million iPhones. Sources have said demand for the $100 cheaper, brightly hued iPhone 5C has severely lagged sales for the top-tier 5S, spurring concerns about the iPhone`s market positioning and its ability to compete with a growing profusion of lower-cost rivals.

This month, it finally secured a deal with China Mobile after protracted negotiations, a deal that should enlarge its footprint in the world`s largest telecoms market.



Reuters

First Published: Saturday, December 28, 2013, 07:08


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