Apple granted Tim Cook a “promotion and retention award” valued at $376 million when he took over as CEO in August, the company revealed in its 2012 proxy statement, filed Monday with the U.S. Securities and Exchange Commission.
The award consists of 1 million restricted stock units (RSU). 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 Oct. 5, 2011, received his customary $1 salary last year and declined any new stock or option awards, as he had for years.
In its 2011 fiscal year, which ended Sept. 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.
Cook’s total pay is calculated using data supplied in a proxy statement filed with the SEC on Jan. 9. The following figures are taken from the summary compensation table: salary, stock awards, non-equity incentive place compensation (performance-based cash bonus), and all other compensation. The estimated value of equity awards represents the grant date fair value for stock awards and stock options granted during the fiscal year.