Apple CEO Tim Cook takes a pay cut amid falling iPhone sales

Cook’s compensation consists of a base salary and an annual cash incentive that can reach be worth four times base salary if the company’s revenue and earnings exceed the maximum goals set, as they did in 2015 when Cook received $10.28 million, including $280,000 in “other” compensation. The company had about 3.7% below-the-target annual sales of $215.6 billion, while its operating income also dived by 0.5% to $60 billion during the past fiscal year 2015-16.

“Annual cash incentives are based on the performance of Apple relative to pre-determined objectives for the year, and the performance of the individual executive”, the company said in the filing.

While $8.75 million may seem like a lot, it isn’t “outrageous” considering the job, said Peter Morici, a University of Maryland business professor and former director of economics for the U.S. International Trade Commission, on Fox Business’ “Varney & Company” on Friday morning. Tim Cook’s basic salary actually did increase this year to $3 million. Cook said “sell through” (actual sales, not just inventory shipped to stores) during the first week of the holiday season was the strongest the product has ever seen.

Cook’s recorded compensation does not account for the 1.26m in Apple shares he was awarded this year, the majority of which were the result of him remaining chief executive for five years, which totalled to a value of $135m in August at the time of disclosure. All told, Cook’s total compensation was $8.7 million a year ago, compared with $10.3 million in 2015.

Everyone has been talking about Apple cutting Tim Cook’s pay package for 2016 by 15% to a “mere” $8.5 million for fiscal 2016 (ended September 25, 2016).

Although Apple posted better than expected profit margins in Q4 of 2016, its iPhone sales continued to decline for the third quarter in a row.

The iPhone maker cut Cook’s pay by 15% previous year to $8.7 million, according to a filing released on Friday. But Apple’s Senior VP of Retail Angela Ahrendts still managed to rake in a monstrous $22.9 million in 2016 to secure the title of ‘top executive earner’. The other executives saw total compensation drop by more than $2 million. He earned additional shares because of Apple’s stock performance.

Apple’s CEO Tim Cook took a pay cut in 2016 after the company missed key economic goals. Apple is also reportedly planning improvements to its iPad, Apple Watch, and Macs, suggesting 2017 could be a big year for the company’s hardware efforts.