When Apple’s proxy filing revealed new CEO Tim Cook’s total compensation for 2011 was almost $400 million, many people (at least in our comments) were freaking out.Regardless of how you slice it, Cook will be making a lot of money over the next 10 years.
He didn’t get $400 million in the bank last year, he was granted 1 million in restricted stock options. Half of those options vest in 2016, and the other half vest in 2021.
But those options will be worth a lot. If Cook can keep Apple’s stock near its current levels that means he’ll earn around $40 million a year for the next 10 years. If the stock price craters, and is at $200 on average over the next 10 years, he’ll make $20 million per year on average.
(We’re not judging Cook’s salary. If he can keep the company cranking along, then he mostly deserves it.)
What will Cook do with all of his moolah? Probably nothing. Just like Apple tends not to spend its massive pile of cash, Cook tends not to spend his own piles of cash.
In an organisation that frowned on talking about money, Cook was extraordinarily frugal. Well after he had sold more than $100 million in Apple stock, he rented a modest home in Palo Alto, a little over a mile from where Jobs lived. (In 2010, Cook finally bought a house of his own, not far from his previous rental, but hardly an extravagant one. Public records indicate he purchased the house for $1.9 million, which in Palo Alto qualifies as a modest abode.) Asked why he lived so humbly, he once said: “I like to be reminded of where I came from, and putting myself in modest surroundings helps me do that. Money is not a motivator for me.”