r/technology • u/geoxol • Jan 13 '23 • Bravo! 1 Helpful (Pro) 1

Apple CEO Tim Cook to take more than 40% pay cut Business

https://apnews.com/article/technology-apple-inc-tim-cook-business-d056553b10120c4a968b562cb7ece5d2
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u/NEONSN3K Jan 13 '23

The difference is. He’s taking a pay cut, in which all CEOs should. The pay difference is so disproportionate it’s no wonder the world is struggling when the workers who are the life blood of the economy aren’t being paid enough in lieu of the rising inflation.

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u/jandkas Jan 13 '23

Honestly good on him. He's taking a pay cut along with other execs so Apple doesn't have to lay off people...hopefully

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u/[deleted] Jan 13 '23

…which will help Apples long run profitability, increasing his wealth.

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u/jandkas Jan 13 '23

Yes that's the point.

But it's better than salesforce where the CEO just layed off a bunch of people + told current workers to work harder, and increased his wealth with the temporary surge in stock price.

Things aren't black or white, some things can be grey with lighter or darker shades.

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u/[deleted] Jan 13 '23

True, I was just implying this isn’t an act of social responsibility by Apple or Cooke. It’s a profitability action, which is aimed to benefit shareholders. Corporations exist to create shareholder value. Period. Any appearance of social responsibility is aimed at that goal.

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u/VaderOnReddit Jan 13 '23

While you're right, but it's still good to give credit to making the decision that's good for "everyone, including myself" over "screw over everyone and benefit only myself"

Even if the first option is what we "expect" everyone to follow, it rarely happens. And it's okay to give positive reinforcement to the "good" actions, instead of giving a backhanded compliment like "oh that's so nice of you to do what is expected from you!"

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u/[deleted] Jan 13 '23

Sure. We reward those businesses as consumers. As long as consumers care about social responsibility, environmental etc then businesses will utilize that for sales. It doesn’t matter because a corporation is just an organizational structure. If it works to promote things I like or flavors I prefer, then I’ll reward that.

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u/erosram Jan 14 '23

Please shut up

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u/Biixby_ Jan 14 '23

Apple is actually doing a big lay off right now and currently are on a hiring freeze.

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u/[deleted] Jan 13 '23

That’s not why he’s taking a cut in his compensation. It’s in part of a broad compensation restructuring at Apple. In fact, it’s likely it will increase his wealth as it will boost apple earnings - not because they are paying less to management, but because the purpose of the restructuring is to raise profits.

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u/jackityjack Jan 13 '23

The proportional boost to apple's earnings and thus stock price thus Tim Cook's wealth from cutting his comp doesn't even come close to breakeven lol

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u/[deleted] Jan 13 '23

His annual compensation is being cut by 40% which is 40m. He has probably over a billion in Apple stock or options. so all it would take is a 4% increase in share price over his time to equal that.

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u/jackityjack Jan 14 '23

Correct! And 4% of Apple's 2.14 Trillion market cap is $85.6B.

This salary cut is 0.05% of that 85.6B.

Does saving $40M create 2,000 times it's value in market cap? Of course not. It's silly to propose that Tim Cook financially benefits from this.

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u/[deleted] Jan 14 '23 edited Jan 14 '23

The company isn’t just saving 40m. It was a cut to all top executives. And that’s annual. Stock prices aren’t based solely on one year of earnings. And even if Cooke isn’t making up for it entirely, it’s not gonna be a full loss by far c

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u/jackityjack Jan 14 '23

Apple's P/E ratio is 22.1 so they'd have to cut 4B in costs to get your 4% stock growth. I'm not sure what your profession is, but you're sure not a finance guy, eh

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u/SparroHawc Jan 13 '23

Considering how much his compensation skyrocketed in the last few years, he's not going to feel it. He's still going to be making more than he did in 2019.

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u/erosram Jan 14 '23

He didn’t even get a 40% paycut. When you factor in all his compensation, it’s closer to a 5% paycut.

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u/Mr_Xing Jan 14 '23

I don’t think Apple employees are underpaid…

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u/fgdfghdhj5yeh Jan 14 '23

he had a ~3000% pay increase in the past 2 years, so a 40% from what it is now he'll still have his ~1800% pay increase

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u/Andrige3 Jan 14 '23

Yes, if they get the benefits and credit when the company is doing well, they should also be the first to get their salary cut when hard times hit. I wish this was typical for ceos.