Apple granted Tim Cook a "promotion and retention award" valued at $376 million (£240 million) when he took over as CEO in August, the company revealed in its 2012 proxy statement, filed with the US Securities and Exchange Commission.
The award consists of one million restricted stock units. Half of the stock units are scheduled to vest five years after the date Cook assumed the CEO role, and half after 10 years, as long as Cook stays employed at Apple. Cook’s total 2011 compensation package, valued at $378 million, also included his $900,017 salary, $900,000 cash bonus, and $16,520 in perks and other compensation.
SEC rules required Apple to report the full grant date fair value of the stock award when it tallied Cook’s total 2011 compensation, but the company reiterated the long-term vesting schedule of the $376 million grant and its significance as a retention tool:
"In light of Mr. Cook’s experience with the Company, including his leadership during Mr. [Steve] Jobs’s prior leaves of absence, the Board views his retention as CEO as critical to the Company’s success and smooth leadership transition. The RSU award is intended as a long term retention incentive for Mr. Cook, and, accordingly, should be viewed as compensation over the 10 year vesting period and not solely as compensation for 2011," Apple noted in its proxy statement.
Cook’s $378 million pay package dwarfs the compensation he received a year earlier. Cook’s total compensation for 2010 amounted to $59.1 million, which included his $800,016 salary, $5 million cash bonus, $900,000 performance-based cash bonus, stock awards valued at $52.3 million and $58,306 in perks and other compensation.
By comparison, former CEO Steve Jobs, who passed away on October 5, 2011, received his customary one dollar salary last year and declined any new stock or option awards, as he had for years.
In its 2011 fiscal year, which ended September 24, Apple’s revenue grew to $108.2 billion, representing a 66% increase over the prior year’s $65.2 billion revenue. Net income grew to $25.9 billion, a gain of 85% compared to $14 billion in 2010. Apple filed its proxy statement on the same day its shares reached a new high: $427.75.