Apple's Board Says Tim Cook Has to Fly Private from Now On (2017) | Hacker News Reader

Apple's Board Says Tim Cook Has to Fly Private from Now On (2017)

entrepreneur.com

56 pointsprostoalex70 comments

For those thinking "What about Jobs?", the article actually alludes to it at the end:

> On a historical note, Cook's predecessor Steve Jobs actually had a private jet all his own: Apple gifted it to him in 2000, a few years after he came back to the company in 1996, as a thank-you present for turning around the company. Apple actually reimbursed Jobs for any time he had to take the jet out for business purposes.

When he's "gifted" a private jet. Are they literally giving him a plane or does that just mean they'll pay for the use of a chartered private jet?

Sounds like they actually gave him a jet. If they just chartered a private jet for him whenever, they wouldn't reimburse him every time he used it for business purposes.

Amazing to imagine that a non-personal use of the plane would require the company to reimburse me!

Apparently it was literally gifting him an airplane.

> After Jobs' death, Apple's design chief, Jony Ive, purchased that jet, with Ive said to have quipped "at least I don't have to redesign anything."

The mention of "reimbursement" would indicate that it was a real gift.

Jobs had his own jet (now owned by Jony Ive https://www.cultofmac.com/296364/jony-ive-now-owns-steve-job... )

> Are they literally giving him a plane or does that just mean they'll pay for the use of a chartered private jet?

The former is in almost all cases cheaper than the latter. Fuel, pilots, landing charges, storage, maintenance, et cetera are the expensive parts of plane ownership.

Plus I imagine he has to pay tax on the gift. Sounds expensive. I'll stick to chartering quadrotors.

Rich people don't charter jets because it may not be available when you need it.

I've seen people who are not even nearly as rich as Jobs own two jets, and there are a lot of them in SJC.

well I always thought that it was gifted to him, since he actually worked for 1 symbolic dollar over a certain period of time?

They "gifted" it? What's wrong with the word "gave"?

It’s ambiguous: gave as in reserved a company asset for his use or gifted it to him personally?

"Gave" misses the subtleties of "gifted". There's a reason that English has lots of words that almost mean the same thing.

Right. You could say that your employer "gave" you a cubicle or a parking spot, but that would not imply that the cube or the parking spot actually became your personal property.

Someone somewhere determined the risk of him flying commercial was more than the cost of him flying private.

I would think, arguably, the private jet itself is less safe than commercial, but I don't have any stats to back that up.

When you add in personal safety (from other passengers), maybe for a high profile person, the private jet is safer.

And obviously it's good in the interest of efficiency.

My first thought too:

http://time.com/2807413/safe-private-jets/

The article seems to conclude that private jets seem to be a little less safe than commercial jets, and they hint at, but don't/can't pick apart sub groups of say a corporate maintained jet vs a charter jet.

Good find, thanks! It's much closer than I'd think. Not that I previously would have been afraid to fly a private jet, but those stats would greatly comfort me.

Now, per passenger-mile, that's not so good, but when you're deciding how to fly a person from point A to point B, you care more about crashes per hour, which is the stat they use.

Also, sharing this typo because it amused me.

> Indeed, the very hottest business jet out there right now is Gulfstream’s long distance G650, which retails for about $65 million but is already selling for about $75 billion in the secondary market. The waiting list is four years long.

million and billion? As in, ~1,000x the retail price on the secondary market?

Yes, I believe that's the typo.

On average I'd imagine private jets to be higher risk but with a wider spread than commercial airlines -- but if you can pick the best maintenance crew, best pilots, etc., then you can select the lowest risk in a way that's not going to be possible travelling commercially.

I'd guess "private flight" statistically has higher incident rates, but it's possible to beat commercial on an individual basis if you hire the best pilots, buy a large top-of-the-line plane with cutting-edge avionics, etc which I'd assume Apple does for its CEO.

I think most private flight incidents are caused by pilot error, particularly in low-viz conditions where good instruments would help.

According to the Nall Report[0] for 2014 from the Airplane Owners and Pilots Association’s Air Safety Institute, “Pilot-related causes consistently account for about 75% of non-commercial fixed-wing [general-aviation] accidents.” Those causes are fuel management, weather, takeoff and climb, maneuvering, descent/approach, landing, and other (inadequate preflight inspection, accidents while taxiing, attempted go-arounds, loss of engine power due to failure to use carburetor heat, controlled flight into terrain [CFIT], unexplained loss of control in cruise, pilot impairment by alcohol and/or drugs, pilot incapacitation, in-flight suicide, midair collisions, collisions between airplanes and ground vehicles, and collision between a glider and tow plane). The top four categories by number of fatal and non-fatal accidents were, in order, landing, other pilot-related, takeoff and climb, and fuel management. Most weather accidents were flights conducted under visual flight rules that entered instrument meteorological conditions (VFR into IMC). Legally flying in IMC requires all of an instrument rating, a suitably equipped aircraft, a pilot with instrument currency (adequate recent experience in actual or simulated IMC), and an IFR flight plan.

[0]: https://www.aopa.org/-/media/files/aopa/home/training-and-sa...

All that said, the results above are likely not representative of a corporate jet flying the CEO of Apple around. Within the FAA’s jurisdiction, piloting an aircraft above 12,500 pounds max gross takeoff weight requires a type rating, i.e., certification that the pilot is qualified to fly that specific type of airplane. Many such airplanes will require two pilots, and jets commonly require the pilot in command at least to hold an Airline Transport Pilot (ATP) certificate. The G650 that Jobs owned[1] has a MGTOW of 20,000 pounds.

[1]: https://flightaware.com/resources/registration/N2N

Whereas about half of the accidents described above involved pilots with a private certificate only — and insurance companies hate VFR-only pilots because of the accident rate — any pilot qualified to fly a corporate jet will have additional training, ratings, and thousands more flight hours compared to Joe Average Private Pilot smashing bugs in a Cessna single. The G650 will have two such highly trained pilots: a type-rated ATP PIC and a type-rated first officer (at least commercial, probably ATP). This makes the operation not twice as safe but thousands of times safer.

> All told, Cook made $12,825,066 at Apple in 2017 -- including a $16,200 contribution to his 401(k) retirement account from the company.

$16k 401(k)really? Is that from a legal requirement?

I'm sure he has an accountant handle that stuff.

It's (tax) free money, why not take it?

Why wouldn't he contribute the 2017 max of $18,000?

It’s not his contribution. It’s the company match.

The $16k figure sounds like the amount that Apple contributed on Cook's behalf via matching funds.

In 2017 companies may only use up to $270,000 when calculating company matches to a 401k * whatever their max limit is for normal staff. 275 * 6% = 16.2k which sounds about right.

https://www.irs.gov/retirement-plans/401k-plans-deferrals-an...

This seems like the most logical answer in the thread

I really doubt he even knows about this. His accountant goofed, probably.

The other way around, if his financial professionals weren't taking advantage of this total "gimme" of the planning world, he'd probably be concerned.

Gotta postpone those taxes and get that corporate match :-P

> Is that from a legal requirement?

No and it's just weird.

If he contributed the maximum he could have contributed 18,000 plus 6,000 catch up taking him to 24,000 with a defined contribution maximum limit from all sources of 60,000.

That means they could have contributed another 20k.

There are rules about how much the company contributions can be (aimed at preventing executives paying themselves huge tax-free pensions).

For employee contributions the max is $18,500k and for employer contributions it’s $32,500. You can also add $6,000 more if you are over a certain age.

I'm talking about the rules that relate the contributions by the company to highly compensated individuals vs the bulk of the workforce.

See https://www.goodfinancialcents.com/401k-limits-for-highly-co...

The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit.

And/or Apple matches 1:1. The personal maximum contribution is $18,000/yr, and he intentionally stayed under that limit.

>The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit.

60k, he's over 50.

The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit.

Not sure I understand. How could he hit the limit? Tim can contribute $24,500 ($18K + $6K since he's over 50). If Apple matched $16,000, how could he hit the max of $60K?

I believe companies can add more to the 401k than what the person contributes.

Yeah, but the article states Apple contributed $16k.

Maybe it’s the highly compensated employee clawback? I know if you make over a certain amount your contribution and matching limits can come down.

I always find these 401k contributions to extremely high paid executives as kind of comical. That’s an effective match of 0.12% or, to really put it in perspective, the equivalent of a $72 yearly match for an average American making 60k.

It’s free money, why not take it?

Some people don't waste their time when it's inconsequential to their lives.

https://www.nbc.com/late-night-with-seth-meyers/video/graydo...

Free money is free money.

I guess Cook has someone take care of his payroll elections, and will have someone manage the withdrawals or the account in his estate. That person likely costs less per hour than the money saved by doing the paperwork.

Waste their time? You have to fill out the 401K form anyway, and it's not more effort to click the "Gimme free money!" button than it is to click "Do Not Want Free Money!". Even at benefits enrollment time, it could take 60 seconds to get to the "Max it out, bitches!" button rather than the "Keep everything the same".

And while I'm on the topic, why is it that no company I've worked at has a "whatever the legal limit is for a person my age" button instead of making me do the math each time?

Supposedly Apple will match up to 100% after several years of employment. Tim Cook is above the catch-up age so he can throw in $24k/year and I would imagine he is doing that, he can definitely afford it. So maybe Apple really doesn't do 100% or Cook isn't throwing as much into his 401k as he could be. He makes more in one year than most people have in their 401k when they retire.

compared to other CEO compensations, that's actually pretty low compensation comparatively (from this analysis of Fortune 100 CEO compensations: https://craft.co/reports/fortune-100-ceo-salaries)

These CEO compensation comparisons are almost always bullshit because of the way CEOs are usually periodically compensated with a large stock award that vests some number of years later.

Using Cook as an example, given he was previously awarded 7 million shares of AAPL, if you averaged that out over time he'd be right at or near the top. From another article:

> Cook did not receive a stock award in 2017, after receiving a large award of 7 million shares that vests on an elongated schedule through 2021 upon being named the successor to Apple co-founder Steve Jobs in 2011. That award was valued at $378 million at the time, making him the highest paid CEO of that year.

I'm surprised it's that little considering how well the company has performed since he's been CEO.

His stock is worth a slight bit more than that.

The 12M refers to salary, which is a rounding error compared to the value of his stock and options.

I have the same answer down the threat but basically:

They can only calculate company mach using the same formula as everyone else and a salary limit. For 2017: 270,000 * 6% = 16.2k which is the number given.

https://www.irs.gov/retirement-plans/401k-plans-deferrals-an...

PS: My guess is the 6% is because they do something like 100% matching up to 6% salary.

Apple hits 1 trillion in value.

Canada gdp : 1.7 trillion

Catching up!

Not really apples to apples, pardon the pun. Total value of Canada is much higher.

Yeah, comparing GDP to market cap doesn't really make any sense. Revenue to GPD would be a bit closer, but still really apples to oranges.

That's comparing apples to oranges. GDP measures production/income, not really comparable to market value.

The total market cap for the Toronto Stock Exchange is $2.2 trillion, for example.

As an American, I would love Canada to become even better off economically than they are today, which is pretty comparable to the US on a per capita basis.

Pretending Apple market cap is 1T and Canada's GDP is 2T is it not just saying "If you took half of all goods and services sold in Canada for 1 year you could buy Apple"?

That's like comparing your salary to my net worth, and trying to glean some meaning from that. All this says is that on Canada's salary, they could surpass Apple's net worth in under a year.

A better comparison would be to net worth of all Canadians which is probably around $10 trillion.

https://www.ctvnews.ca/canada/canadians-record-debt-levels-h...

(2017)

Can we tag this [2017] ?

Only if we use the correct form of parentheses.

[2017]

That seems rather dumb. Flying private it one of the all-time productivity enhancers in both minimizing travel time and maximizing in-transit work-time.

What part seems dumb?

Ah, I misread it as the opposite!

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