Apple’s CEO has docked himself a hefty $4 million in pay, as a direct result from Apple’s underperforming stock price earlier this year, according to a proxy statement filed on Sunday (via CNN). Expressing a “strong desire to set a leadership example in the area of CEO compensation and governance,” Tim Cook insisted on putting half of his own stock grants at risk if Apple’s shares underperformed the S&P 500 index this year.
Apple’s stock fell 26% percent from August 2012 through August 2013 while the S&P 500 index rose 18% during the same period. The 50% stock that Cook forfeited was worth nearly $4 million when the stock vested. Even so, that number represents only 10% of what Apple paid its CEO this year: $1.4 million in salary, $2.8 million cash bonus, and $36.4 million in stock grants.
Of Cook’s one million restricted stock units (RSU) award, 80,000 RSU are supposed to vest each year on August 24th for ten years, with 100,000 RSU supposed to vest both in 2016 and in 2021. Thus, each year 40,000 RSU of Cook’s can be directly affected by a negative stock price performance compared to the S&P index. However, this year, Cook only forfeited 7,123 RSU following an award modification change that took place earlier this year during the vesting period of the original 2011 grant.
