The chief executive of iPhone maker Apple will receive a pay cut, as the company failed to reach its annual sales target last year.
As a result, Tim Cook, the CEO of Apple, will face a 15% cut in his compensation for 2016, according to a company’s filing.
Despite an increase in his salary to $3m last year compared to $2m in 2015, Cook’s compensation was hit by a drop in his cash bonus.
The annual cash bonus paid out to Cook fell to $5.4m in 2016 from $8m in the previous year. Overall, his compensation stood at $8.7m last year, while it was $10.3m in 2015.
Apple reported $215.6bn in net sales and an operating income of $60bn for the year
2016, missing the targets by 3.6% and 0.5%, respectively.
The technology giant said: “Apple delivered another year of strong financial results in 2016. However, the two financial measures used to evaluate executive performance under our annual cash incentive programme, net sales and operating income, declined from our record-breaking 2015 levels.
“These results were below the target performance goals set by the Compensation Committee. As a result, the annual cash incentive payouts to our named executive officers were below target.”
Apple’s net sales and operating income was 7.7% and 15.7% below the levels recorded by the company in 2015.
The company said: “The 2016 payouts to our executive officers were significantly less than the annual cash incentive payouts for 2015, reflecting strong pay-for-performance alignment.”
56-year old Cook has been working as Apple’s chief executive officer since August 2011 and was previously its chief operating officer since October 2005.
After joining Apple in March 1998, Cook served as executive vice president, worldwide sales and operations from 2002 to 2005. From 2000 to 2002, he served as senior vice president, worldwide operations, sales, service and support.
From 1998 to 2000, Cook served as senior vice president for the company’s worldwide operations.
