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Apple's Tim Cook: I'm risking my own MEELLLIONS if we sink
Jobs' successor ties pay packet to fruity firm's performance
Apple CEO Tim Cook has tied his future pay packet to the fruity firm's performance, in a move which could end up costing him over $100m.
In a bid to stave off concerns that his company is on the verge of catastrophic decline, Steve Jobs' heir has put his own neck on the line by promising to sacrifice almost 40 per cent of the stock he was promised in his original contract if Apple's share price slumps.
The decision is a sop to spooked investors worrying about Apple's stock price, which has plunged by 41 per cent in the last year.
The new terms of Cook's pay packet were announced in a report filed with the Securities and Exchange Commission.
Cook was originally promised a million shares which would be paid out in two instalments in 2016 and 2021 - as long as Cook was still working for Apple. Now he has accepted a deal linking the number of shares he will receive to Apple's stock price.
Cook will still receive 672,877 of these stocks in instalments simply for hanging around. However, the rest will be put on the line.
If Apple is ranked in the top third of the S&P 500, Cook will receive his full instalment of 80,000 shares for that year. If Apple places in the middle third, Cook will receive 75 per cent of the total amount of stock and if Apple languishes in the bottom third, he’ll get just 40,000 shares.
Considering the original deal would have netted him about $413m, if measured using Apple's current stock price of $413.50, this appears like a pretty brutal change to Cook's deal. But the Cupertino CEO wanted to put even more stock on the line.
The filing said: "Because Mr Cook faces only downside risk from the modification [to his original deal], the Committee believed that less than 50% should be placed at risk. Mr Cook, however, expressed a strong desire to set a leadership example in the area of CEO compensation and governance and requested a larger at-risk percentage."
Apple's Compensation Committee, which is part of the Board of Directors, also said that the rest of the fruity firm’s top brass will take up similar schemes, with Cook expected to "lead by example". ®