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Four Apple execs amongst top 5 'most richly compensated'

updated 11:44 am EDT, Mon April 15, 2013

CEO Tim Cook notably missing

Four out of the top five highest-paid executives among Standard & Poor 500 companies belonged to Apple during 2012, according to the Securities and Exchange Commission filings seen by Bloomberg. The people included senior VP of Technologies Bob Mansfield, CFO Peter Oppenheimer, senior VP of Operations Jeff Williams, and general counsel Bruce Sewell. About 80 percent of S&P 500 companies had submitted 2012 data as of April 12. The figures for the Apple execs are based on the total current worth of their possible stock and pay packages, rather than their actual 2012 salaries and bonuses.

2012 is observed to have been the second year in a row that people at Apple were in the list of the most compensated, despite the fact that the calculations are based on unrealistic assumptions. For example, the figures related to the executives stock awards are based on what were worth at the time they were awarded, ignoring both the fact that they cannot cash out those restricted stock awards for a number of years and that the stock value has already gone down (and may go either up or down in value by the time they are actually redeemable).

One notable difference this year is the absence of Tim Cook, but only because Apple's rankings are all related to retention packages, and Cook received his in 2011 after taking over from Steve Jobs as CEO. His compensation hit a theoretical $378 million, mostly in the form of restricted stock units (RSUs).

This often-misreported claim is again based on the value of the award when it was given to him in 2011 -- and even if it retained that value, it will be at least three more years before Cook sees any of that money, assuming he is still CEO by then (and when he does receive it, he will be paying taxes on it -- again reducing the theoretical value). Apple's stock has dropped by about 40 percent since Cook received the units, "costing" him nearly $100 million in theoretical value.

Mansfield received $85.5 million in 2012, again mostly in the form of stock. The amount made him the theoretical second best-paid person in the US, but may have been needed to convince him to abandon his retirement plans. Like Oppenheimer, Williams, and Sewell, Mansfield received a base salary of $805,400 -- which along with any bonuses or cash-outs of previously-held stock amounts to an actual compensation for 2012 that is a small fraction of the claim of receiving tens of millions per year.

The stock awards are tied to continued employment with the company, are only eligible for redemption after a certain number of years, and will not be worth the same amount when they are redeemed as they are today or when they were awarded. Executives who leave or are fired automatically forfeit much of the alleged "compensation."

None of the executives were actually awarded an amount of money anywhere near the claimed total possible worth of their compensation packages, but SEC rules require Apple to put a monetary value on the current potential value of the overall packages, even if the figures are affected by a variety of variables and are unavailable to the individuals within the year reported.

The top position in the 2012 SEC figures belongs to Oracle CEO Larry Ellison, who reaped $96.2 million. Curiously left out of Apple's filing are some other executives like Senior VP of Worldwide Marketing Phil Schiller, or Internet services head Eddy Cue, but their compensation package values will likely be reported in a future filing.

by MacNN Staff



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