Tim Cook's 2021 Compensation Rose 500% As Apple Marched Towards $3 Trillion

By on January 10, 2022 in ArticlesHow Much Does

Apple has experienced several monumental milestones in recent months.

First off, Apple's stock price ended 2021 up 33%. And keep in mind that Apple started the year with a market cap of $2.4 trillion, so increasing a full 33% on top of an already massive number is not exactly an easy achievement. Apple's market cap has increased by around $600 billion compared to a year ago today. That's like adding the combined values of Coca-Cola, Exxon and Walt Disney to its market cap in 12 months. For additional context, Disney has a market cap of $286 billion as of Friday's close. If Disney's stock increased 33%, the company's market cap would increase by around $100 billion, to $380 billion. That would be considered absolutely astronomical stock performance. Apple added $100 billion in market cap to its value every TWO MONTHS in 2021.

Speaking of Apple's market cap. Last week Apple accomplished another impressive milestone when it became the first publicly traded company in history to achieve a market cap above $3 trillion. It ended the week back down at $2.82 trillion but consider this: It took Apple three years to triple in value from the first time it crossed $1 trillion back in August 2018. It only took 502 days to go from $2 trillion to $3 trillion.

And finally, in August 2021 Apple marked the 10 year anniversary of Tim Cook taking over as CEO from company co-founder Steve Jobs. And what a decade it has been.

Apple's peak market cap under Steve Jobs was $360 billion. So under Tim Cook's steady hand, Apple has increased nearly 10x. If you had bought $1,000 worth of Apple shares on the day Tim Cook became CEO, a decade later you would be sitting on around $15,000.

Long story short, Apple under Tim Cook's guidance has been nothing but a rocket ship to mars. And as the pilot of this rocket ship, Tim has rightly earned a massive fortune.

(Photo by Stephanie Keith/Getty Images)

According to company filings, in 2020 Tim Cook's total compensation was…

$14.8 million

In 2021 Tim Cook's total compensation was boosted to…

$98.7 million

That's a well-earned 500% increase in annual pay.

Tim earned $3 million in base salary in 2021. He also earned a restricted stock grant valued at $82.3 million. The remainder of his compensation consists of retirement benefits, security costs and travel costs (he's required to fly on Apple's private jet everywhere, for personal or business reasons and this is considered a form of compensation).

When Tim first became CEO of Apple back in 2011, he was given a large grant of options that vested in 10 annual increments (he received the first chunk up front, so technically only 9 tranches vested over time). A chunk of his grant was performance-based. Those shares would be granted only if Apple out-performed 2/3 of the S&P 500. He hit every single performance milestone over the decade. He received his ninth grant, roughly 560,000 shares, in August 2020.

To incentivize him over the next few years, Apple's Board gave Tim a new large equity grant at the beginning of 2021 that will keep him with the company through 2025. Before this grant, Tim outright owned 0.02% of Apple. With the latest grant, Tim Cook's net worth tops $1.5 billion using the company's current market cap.

If Apple grows at the same pace over the next three years as it has over the previous three years (a very very very big challenge), Tim could retire in 2025 with a net worth above $4 billion.

He would certainly have earned it.

The good news for all of us normal humans is that Tim plans to donate 100% of his wealth to charity before he dies! So we should all be rooting for Apple over the next few years.

[Disclosure: I own some Apple shares in both a retirement and non-retirement stock account. I am not a stock expert. This is not financial advice.]

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