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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9.6k

u/CedarBuffalo Jan 13 '23 • Silver Gold Bravo!

Well. How do you like Tim Apples?

747

u/No_Employment_129 Jan 13 '23

According to the article, the pay cut was advised partly based off his own recommendation.

It’s a 40% cut of his salary, which is $3m, so down to $1.8m. Still rich beyond anyone’s wildest dreams. AND, his stock options value is roughly $100m. And who knows how many other investments he has, which have nothing to do with this article.

Seems like a publicity stunt to me.

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u/[deleted] Jan 13 '23

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u/[deleted] Jan 13 '23 edited Jan 13 '23

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u/DoctorWorm_ Jan 13 '23

We should go back to the 20:1 ceo pay ratio we had in the 60s. And that should include the impoverished people making his iPhones.

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u/Clewin Jan 13 '23

Or 10:1 as per Japanese CEO to average worker or 11:1 for Germany. I don't know if that has changed much, but that's what I remember from 8-10 years ago when I worked for a German company with a highly paid CEO causing their average to be much higher than even 11:1 and being one imbalance factor (but still under compensated by US standards by about 1/3).

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u/Josvan135 Jan 13 '23

Serious question though, who would possibly take on the kind of unimaginable responsibility of running a company the size and complexity of Apple for $1 million or so?

Like an above commenter pointed out, any solidly successful wall street middle exec can make more than that.

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u/boforbojack Jan 13 '23

I mean I tend to hear, "Don't worry you're also getting paid in experience and exposure".

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u/Josvan135 Jan 13 '23

Which is bullshit, as you well know.

You take on an internship to make connections, learn valuable skills, and set yourself up for later opportunities.

The CEO of the largest and most profitable company in the world has all the experience and exposure they could possibly need.

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u/sobanz Jan 13 '23

people who are unqualified

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u/wycliffslim Jan 14 '23

I'd run Apple for a million dollars a year. Sign me up.

They could also just have the average salary be higher, and then if you want to give your CEO a huge bonus, you equitably reward the rest of the employees who helped. Sure, you could be a wallstreet exec and get millions, but they also make too much money.

Do you have any idea how much money even a million dollars a year is? Your average American could work for 3 or 4 years, invest their money, retire, and live a comfortable middle class life for the entire rest of their lives. You could work 4 years and then live the rest of your life in relative comfort without ever working again.

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u/Josvan135 Jan 14 '23

I'd run Apple for a million dollars a year. Sign me up.

What are you qualifications?

How large was the P/L of your last role?

What was the scope of your previous employment?

How many divisions were in your direct reports, and how many tens of thousands of people did you manage?

Do you have any idea how much money even a million dollars a year is?

Yeah, it's about as much as a mid-level law partner, senior manager at a FAANG, or vice president at a medium-sized hedge fund makes.

In the spectrum of leadership roles in a business setting you're talking someone who runs teams of 20-30 high-level performers.

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u/wycliffslim Jan 14 '23

So if companies are that profitable maybe everyone should be making more money.

Quite frankly, I don't give a shit how much the CEO or anyone makes. But the fact that executives and high-level employees will get bonuses of millions of dollars worth of stock while your average worker gets a pizza party and an atta-boy is indefensible.

If your publicly traded company is doing so well, and generating so much profit for shareholders that you can justify tens of millions of dollars for a few employees they are also profitable enough to pass on that abundance to ALL of their employees.

C-level salaries in the US have skyrocketed in the last decades while worker wages have stagnated. That's just objective fact. In 1961 the realized CEO pay to employee was 21-1 in 1960's, 61-1 in the 80's and was 293-1 in 2018 and the discrepancy continues to surge ahead.

https://www.epi.org/publication/ceo-compensation-surged-14-in-2019-to-21-3-million-ceos-now-earn-320-times-as-much-as-a-typical-worker/

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u/sobanz Jan 14 '23 edited Jan 14 '23

you would run apple or you would try to run apple?

people with the skillset to run a multibillion(or trillion) dollar company are paid this much because it is a difficult job. cap ceo salary at 1m and the big talent will just make startups for many times that amount. it's simple risk vs reward.

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u/DoctorWorm_ Jan 14 '23

Fucking bullshit, most C-suite folks are overemployed idiots with rich friends who can't keep viruses off their company laptop

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u/grimoireviper Jan 14 '23

So you're saying there'd be more companies led by competent people that would raise competition? Sounds like a win to me.

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u/sobanz Jan 14 '23

no I'm saying there would likely be a shortage in competent leadership since they would find other ways to make more money.

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u/erosram Jan 14 '23

This actually makes me think we should spend more on time cook

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u/[deleted] Jan 13 '23

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u/Josvan135 Jan 14 '23

How is that relevant to my point?

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u/Clewin Jan 13 '23

Steve Jobs took a $1 salary. He got 30+ million in options based on performance and they vested. We're talking base salary, not perks.

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u/Josvan135 Jan 14 '23

I'm referring directly to the above commenters 10:1/20:1 comparison.

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u/astrange Jan 13 '23

Those Japanese CEOs may get paid 10x average worker, but they also get a house, car, helicopter, country club membership etc for their exclusive use that happens to be owned by the company.

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u/chostax- Jan 13 '23

At least the money goes back into the economy? Idk lol it’s definitely the better scenario though.

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u/nutyo Jan 13 '23

All working class money goes back into the economy. Only people who have not only more than they need, but more than want, don't put all their money back into the economy.

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u/gcz77 Jan 13 '23

That is kind of Silly. Apple has lots of Employees making 20 times more than the people working in the stores.

Are you suggesting that Apple should fire the top >50% of it's software developers? Should the CEO job be a pay decrease in comparison to the pool of skilled workers Apple might want to hire from?

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u/DoctorWorm_ Jan 14 '23

I mean, I agree that its hard to immediately adjust wages like that, and it's hard to compete like that when so job markets are so skewed and manipulated. But yes, in an ideal world, office workers would get paid like $200k, ceos would get paid like $1M, and front line retail and manufacturing workers would get paid like $50k ($25/hour)

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u/gcz77 Jan 14 '23 edited Jan 14 '23

I'm not understanding, once you are software developer productive enough to Justify 200 grand salary (between level 1 and 2 at Apple), what is your incentive to work up to 1 million, or move up from development for an even higher salary?

What is the incentive to develop these necessary skills if you will never make more than an entry level developer at Apple?

Are you productive enough to justify a 200 grand salary? Great, there is no point improving beyond that. Hold up. We need really smart people to work on complicated projects, we can't just have people managing packets of information and organizing data!!!

To bad, you make the same 200 grand either way, and anyone productive enough to justify 200 grand has no reason to do anything else. Once a person can contribute 300 or so grand of productivity they have no reason to develop any other skills, which kind of sucks because that's how you get all modern tech.

Have you heard of OpenAi and ChatGPT, awesome innovation, average salary is around a million dollars. Google spends 40 billion a year on R&D, most of which goes to software development, and seems to have unreleased products that perform even better that openAi. Not simply language models but tons and tons of other stuff too. Guess how much the people working in those labs are making?

You need an incentive structure to move an economy, and you are proposing an incentive structure that includes no incentive for people doing the most important and productive jobs.

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u/DoctorWorm_ Jan 14 '23

Are you telling me some fresh grad who knows how to sort data is putting in 6x the effort and generating 6x the value as someone pumping out 100 iPhones a day lmao

The whole "incentive" thing is a tired capitalist talking point. Even with UBI, there's still plenty of incentives for people to labor for profit.

Nothing wrong with flattening the pay scale a bit, it worked for the us in the past, and it works well for European companies.

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u/gingerkids1234 Jan 13 '23

Those people making phones aren't employed by Apple.

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u/astrange Jan 13 '23

"Making phones" isn't an accurate description anyway. They do final assembly, but the expensive parts are made in Taiwan, Japan, or the US. It's not sand in phone out.

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u/ChillyBearGrylls Jan 13 '23

And that should include the impoverished people making his iPhones.

That still won't bring jobs back (or raise wages), Bernie. The only reason workers had that leverage then was underdevelopment elsewhere, to such an extent that some products could not be made outside the "West". Western laborers have to compete with everyone now, and they aren't as entitled.

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u/drewbert Jan 13 '23

> Western laborers have to compete with everyone now, and they aren't as entitled.

Trade agreements exist for a reason, and there's no reason the US couldn't insist that its trade partners give their workers roughly western compensation and follow roughly western environmental policies. Rather than impoverishing Americans to compete with the world, we would be challenging the world to build out the strong middle class that we used to have and used to value.

Republicans do not value hard work anymore. Their policies have made it clear they see anybody willing to work hard as a fool to be exploited for maximum gain.

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u/ChillyBearGrylls Jan 13 '23

there's no reason the US couldn't insist that its trade partners give their workers roughly western compensation and follow roughly western environmental policies

Why would any sovereign State agree to make itself less attractive to foreign investment? The US isn't the only State whose companies are in the labor arbitrage business.

What you want is more easily achieved with tariffs on the American side (a unilateral decree) set to the difference in PPP + environmental regulations + labor protections.

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u/Jethro_Tell Jan 13 '23

Lol, cause the US doesn't need a lot of foreign investment. It needs to own it's ability to make and build the shit it needs so that when people get sick in China it doesn't fuck up the whole supply chain.

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u/ChillyBearGrylls Jan 13 '23

Lmao you completely missed who would be doing what in both posts

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u/continuousQ Jan 13 '23

A trillion dollar company is ridiculous.

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u/[deleted] Jan 13 '23

[deleted]

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u/PhoenixStorm1015 Jan 14 '23

Yes, but the problem with capitalism and corporate mentalities is there IS NO END GAME. There is no goal or plateau or point where the company is happy. They ALWAYS need more. Obviously there are ways a company can improve without simply trying to eternally make more money, but I think it’s safe to say that one option is VERY encouraged in our cultures. I.E. it’s bad to be greedy, unless it’s a company or an entrepreneur, then it suddenly becomes accepted and often expected.

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u/americandream6969 Jan 14 '23

I think once a company is ridiculously wealthy, they should have to split it in two and the staff choose if they want to work for team Ying or team Yang. All the people who don’t like each other can split. Then Apple Ying and Apple Yang compete in the market and the market chooses which side they want to buy from, price is always same.

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u/SheltheRapper Jan 14 '23

You're actually onto something. That's how commerce naturally functions

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u/Ready_to_anything Jan 14 '23

Price would go down since you just destroyed the monopoly they have on their existing IP

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u/americandream6969 Jan 14 '23

No, the IP remains same as the brand Apple own both versions. It’s only front of house that changes. When one goes bust they have to start another version again, well that’s if that are still worth over the prescribed limit that makes them whatever qualifies as super duper wealthy and having some kind of ridiculous market dominance. It’s just a theory I have. Anyway… plenty of loose ends to tie up, haha, but I’d have a punt anyway if I was gonna buy Twitter at the moment for example.

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u/tehkier Jan 13 '23

There's no way to be that successful in our current economic system without exploiting others. A trillion is one THOUSAND billions, just so you know.

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u/microsoftpaintt Jan 13 '23

There is exploitation in every economic system, it just manifests in different ways. I'm sure its possible to be that successful in our current economic system, you would just need significantly larger economies of scale and way more time to do it.

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u/Josvan135 Jan 13 '23

Okay, and a million is a THOUSAND thousand, just so you know.

It's just inflation combined with the fact that there are 4 times as many people as there were a century ago, each of whom is statistically vastly richer than their ancestors.

Money is nothing but a representation of value.

People highly value apples products and services, so lots of people spend lots of money buying them.

Their manufacturing is messy, as is virtually every electronics manufacturing.

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u/tehkier Jan 13 '23

Just because others exploit doesn't make it okay to exploit. It's not just inflation when you need to kill child labourers or drive your workers to suicide.

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u/Josvan135 Jan 13 '23

Violations that Apple investigated, reported to Chinese authorities, and played a major role in stopping.

I get it, "big business bad", but cherry picking extreme cases while ignoring the massive improvements to overall global standard of living carried out over the last century is disingenuous at best.

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u/Bitter_Coach_8138 Jan 14 '23

Reddit just wants to be edgy and socialist, that’s why

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u/grimman Jan 14 '23

You're not wrong. But Apple being that big just blows my mind. It's been decades since they had an ounce of morality, and their products are very underwhelming for a tinkerer. It's their way, or get absolutely fucked. And they frequently change their mind, at which point it's their new way, or get triple fucked, bucko.

But I guess if you're into that...

Anyway, uh... a trillion dollar company is ridiculous, if it's Apple. ;)

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u/OneAlmondLane Jan 13 '23

So you don't buy apple products?

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u/lamentheragony Jan 13 '23 edited Jan 13 '23

His compensation is $100 million p.a. He agreed to cut it so about $40 million p.a.

Not good enough Tim Cook!!! Pay back 99.9% of all your wealth and income for the past 30 years, YOU LOUSY CROOK!!!!!

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u/CreamBeaner Jan 13 '23

Reddit moment

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u/Lord_Abort Jan 13 '23

I would settle for companies and wealthy individuals to pay 5% annually.

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u/lamentheragony Jan 13 '23

not enough. need to pare them back so they are level largely with everyone else (apart from differences in their needs).

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u/Lord_Abort Jan 13 '23

While it would flush the government at all levels with tons of liquidity, I'm pretty sure that would quickly destroy the economy. Man, I can't even imagine some of the ripples that would create.

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u/Josvan135 Jan 13 '23

Cool cool, so then you don't want anyone with extraordinary skills, talents, or training to ever pursue high stress, highly responsible employment?

Because if everyone makes the same as your average ditch digger, I can assure you that no one is dealing with the kind of issues that a CEO is dealing with.

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u/lamentheragony Jan 13 '23

There are imany ceos in Finland and nordics who do the same job for 1/1000th the pay. You do not need that size pay to find people to do the job.

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u/Josvan135 Jan 14 '23

1/1000th the pay is $50,000, so I'm going to call bullshit on your figure there just from a basic numerical perspective.

How about you find some actual verifiable figures on Finnish, swedish, and Norwegian CEO pay.

You do not need that size pay to find people to do the job.

Yes, you 100% do.

Find me someone who's actually qualified to run a $2.14 trillion company for $50,000 and I'll show you a bridge I have for sale.

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u/AJ-Taylor Jan 13 '23

As an EMT for $15, I'd like to hear more about the stress these poor CEOs need millions in compensation to cope with.

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u/Josvan135 Jan 14 '23

So when was the last decision you made that had implications for the livelihood and future of 200,000 employees?

You're an EMT, it's a noble profession, you do a lot of good, but you see an average of, what, 8-12 calls per shift?

So assuming you in your entire career, you'll directly impact up to 25,000 people over 40ish years.

The stress is the insane pressure of being in charge of that much of other people's money for decisions that you're directly responsible for, and that you'll be second guessed about at every step along the way.

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u/AJ-Taylor Jan 14 '23

I'm not super interested in debating the most stressful professions, but I really don't think making those decisions would bother me personally. The stakes just aren't that high; people can get new jobs, other companies make phones, and it doesn't matter if people are mad at you if you never need to work another day in your life. But stress is subjective, so maybe Tim Cook is crying himself to sleep every night, I don't know.

I mostly just take issue with the idea that nobody would do that job without ludicrous compensation. Society is held together by people doing essential jobs that pay terribly, because they're passionate about them. Hell, my phone runs an operating system based on one created by people who just like building stuff for free. Running Apple is like Everest for thousands of nerdy tech guys. Elon just paid $44 billion so he could be CEO for his own ego. As long as something is difficult, important, or prestigious, people will want to do it.

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u/Josvan135 Jan 14 '23

but I really don't think making those decisions would bother me personally. The stakes just aren't that high; people can get new jobs, other companies make phones, and it doesn't matter if people are mad at you if you never need to work another day in your life.

To be clear, this is exactly the reason you aren't and will not ever be qualified to run any serious company.

I'm not trying to be mean/argumentative here, but you just brushed off the importance of decisions that can financially ruin millions of people.

It's not just current apple employees, it's all the people with their 401k's filled with apple stock, and the suppliers who depend on apple.

You literally just said that you would "take your money and run".

So again, you're not even remotely qualified for the position.

Running Apple is like Everest for thousands of nerdy tech guys

Cool, that would be great if you wanted some nerdy tech guy, but you want a business virtuoso who also happens to be a ruthless, driven, and incredibly focused individual.

Your average tech bro can't make it managing a small development team, forget running the largest multinational company in the history of humanity.

Society is held together by people doing essential jobs that pay terribly,

Correct, most of whom are only in those jobs because they have virtually no skills and no ability to gain new skills.

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u/musicantz Jan 13 '23

WS partner?

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u/smuckola Jan 13 '23

Don’t worry! He made $99m last year alone, in pay alone, aside from stock and such. Enough for a jillion lifetimes for his whole current family and all descendants forever and ever amen.

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u/MarBoBabyBoy Jan 13 '23

That's only his salary, his stock is worth a lot more than that.

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u/Double_Secret_ Jan 13 '23

His compensation is structured that way to 1.) make him look like he’s a reasonable guy to the public as his salary is “only” a few million and 2.) minimize his tax burden, as his salary income is going to be taxed at nearly 40% without even adding in state income taxes.

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u/Sniffy4 Jan 13 '23

yeah this guy can take a paycut to $1/yr and live comfortably

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u/vagrantprodigy07 Jan 13 '23

Most CEO compensation isn't directly in cash. Stock is very common.

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u/chostax- Jan 13 '23

With a stock as consistent as apples, the equity awards are way more valuable than the salary. 40m in Apple stock could be worth 80m in 5 years. That 3m is nothing in comparison, plus he would get those equity awards at set share prices that are lower than the market price.