Apple on Friday revealed that its executive team, including Chief Executive Tim Cook, received a pay cut for their performance in 2016, reflecting the company’s first decline in revenue in 15 years.
The docked pay comes as a result of Apple’s performance-based cash incentive opportunities for its top brass. With net sales of $215.6 billion and operating income of $60 billion, Apple came in slightly short of its respective target goals set by the company’s compensation committee.
“This performance resulted in a combined payout at 89.5 percent of target for each named executive officer,” Apple revealed in a U.S. Securities and Exchange Commission filing.
For Cook and his team, things could have been worse: Apple’s compensation committee has the ability to adjust payouts downward based on performance and individual contributions. However, the committee determined that no such further cuts would be made.
The company noted that the 2016 payments to its executive team were “significantly less” than they received in 2015, as a result of “strong pay-for-performance alignment” in their contracts.
In all, net sales were down 7.7 percent in 2016, and operating income dropped 15.7 percent.
Cook’s base salary was increased to $3 million at the beginning of 2016, up from $2 million a year prior. But his total compensation reached $8.7 million, an overall reduction of over $1.5 million from a year prior.
In fact, Cook earned less in 2016 than he did two years prior, in 2014.
The base salary for Apple’s other named executive officers remained steady at $1 million for 2016, though the overall compensation to them was also reduced. Other named executives at Apple include Luca Maestri, Angela Ahrendts, Eddy Cue, Dan Riccio, and Bruce Sewell.