We all know Apple has become a big company.But, a new proxy statement it filed with the SEC puts in context just how big it has become.
In the filing, Apple says it had to adjust the companies it uses as comparisons for its compensation because it’s so much bigger than its peer group now.
To determine compensation, Apple’s board typically takes a basket of comparable companies, looks at their executive compensation, and then works from there.
But now that Apple is the most valuable company in the world, with $157 billion in annual sales, it’s a lot harder.
Here’s Apple in its SEC filing:
“Prior to 2012, a company would only be included in the peer group if its revenue and market capitalisation were at least one-fifth of the Company’s size. Given the Company’s growth, the threshold size requirement for revenue and market capitalisation were lowered for 2012 to $15 billion and $25 billion, respectively, to help ensure a sufficiently robust sample of peer companies.”
See that? Apple is saying it’s beyond comparison with mere mortal companies.
Apple also added a second group of companies to measure its compensation.
“In 2012, the Compensation Committee also established a secondary peer group of general industry ‘mega-cap’ companies to provide a broader perspective on pay levels and practices for companies of comparable size. The thresholds for inclusion in the secondary peer group were $75 billion in revenue and a 12-month average market capitalisation of $150 billion.”
The companies in this group are Wal-Mart, Berkshire Hathaway, GE, Exxon, and a few others. (And for what it’s worth, the first group of companies Apple outgrew are tech companies like Microsoft, Dell, Amazon, etc.)
And what did Apple determine after looking at all of this? It decided to give Tim Cook a minor pay bump to $1.4 million as a base salary, up from $900,000 the year before. He also got a nice cash bonus, making his total compensation for 2012 $4.17 million.
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