Following a drop in sales and decline in annual revenue for the first time in 15 years, iPhone manufacturer Apple has reportedly cut CEO Tim Cook’s salary by approximately 15 percent for 2016.
According to a Securities and Exchange (SEC) filing released yesterday, Cook received $8.75 million in total compensation for 2016, down from $10.28 million in 2015, which the company said declined for the first time since he assumed office in 2011.
Cook’s base salary, however, rose 50 percent to $3 million.
The cash bonus of the CEO and other executives took a hit as the company awarded them 89.5 percent of their target, instead of the maximum amount like in recent years.
As a result, the 56-year-old’s cash bonus fell to USD 5.4 million in 2016, down from USD 8 million the year before, and declining for the first time since he assumed leadership of the company in 2011.
Sales volume of the iPhone fell in fiscal 2016 for the first time since the device was introduced in 2007, causing the tech icon to suffer its first annual revenue decline in 15 years.
The company said its annual sales were down nearly 4 per cent, or USD 215.6 billion, from its target of USD 223.6 billion, and its operating income was down 0.5 per cent from its target at USD 60 billion, according to the filing.
“Overall, our 2016 performance with respect to net sales and operating income was 7.7 per cent and 15.7 per cent below our record-breaking 2015 levels,” Apple said in the filing.
“However, the 2016 payouts to our named executive officers were significantly less than the annual cash incentive payouts for 2015, reflecting strong pay-for-performance alignment,” it added.
The slump in sales can directly be attributed to stiff competition from rival Samsung and loss of momentum for the newer iPhone, which generates a majority of the company’s revenue.