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The tech world was abuzz Monday when the compensation package for Apple's new CEO Tim Cook was released.
The total for 2011?
$378 million.
This was comprised of $900,000 of cash salary and a $377 million stock grant.
That total compensation, observers were quick to point out, was 378 million times as much as Apple's last CEO made. Steve Jobs, famously, took home $1 a year.
So is Tim Cook's compensation outrageous?
Actually, no, at least in my opinion.
Steve Jobs was paid $1, in part, because he already held a big position in Apple's stock, thanks to an option grant when he returned to the company at the end of the 1990s. Steve's original option grant had exploded in value thanks to Apple's amazing renaissance, so by last year it was worth several billion dollars.
The stock grant that Apple's new CEO, Tim Cook, got last year was not awarded to compensate him for his performance in a single year. It was awarded, presumably, to create an incentive for him to do an excellent job over many years--hopefully, a decade or more. Spread over that decade, even if Apple's stock does not appreciate from here, the compensation looks more normal (huge, but well within the bounds of the egregious amount of money that most of America's big-company CEOs take home).
And let us not forget that Apple is now an absolutely massive company, with more than $100 billion of revenue and a $400 billion market capitalization. The idea that the company's CEO should have a modest salary (by CEO terms) and a 1% position in the company's stock doesn't strike me as outrageous.
My colleague, Yahoo! Finance economics editor Dan Gross, however, disagrees. He thinks Tim Cook is now just another CEO-pig-at-the-trough. No matter what Cook does over the next decade, Dan points out, he'll still walk away with hundreds of millions of dollars. See Also: Tim Cook's Huge Compensation Package -- Check Out The Details Here.
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