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Comment by jellicle | Hacker News Reader

Is Tim Cook really worth as much as 580 regular Apple employees? Really?

Tim Cook alone is taking home 5% of all the money Apple spends on employee compensation worldwide. If you cut down Cook's compensation a little bit, everyone else at Apple could get a couple percent raise.

Which one would REALLY be better for the company: paying every single Apple employee a couple percent more enabling Apple to hire better people across the board, or paying it all to the CEO?

People need to recognize how grotesque it is that you have a CEO making $160,000 per day, every day.

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"If you cut down Cook's compensation a little bit, everyone else at Apple could get a couple percent raise."

Or they could use the money they have and give everyone including Cook huge raises. Or cut everyone's pay and make their stuff cheaper. Or pay their suppliers 20% more. Or put a huge check in some charity basket. Statements like these are pointless.

I'll suggest that it's very likely that Tim Cook would have never come to work at Apple if they paid executives 40-60% less then they do as you suggest. And that would have been a net loss for Apple.

Ask the shareholders. And since I am one I'll answer.

I don't have a problem with this at all. $300M is about 1/1000 of the current market cap. The rewards are spread over 10 years. So 1/10000 per year to have a world class CEO running the company. Would I pay that? Gladly.

Give me a break, you don't think you could've gotten him cheaper?

What's the difference between 580 million and, say, 200 million? It's funny money either way, and the person's quality of work is going to depend on other motivations.

Wow, people are apparently seriously offended by this.

Y'all really don't think they could've gotten him for cheaper?

Again, what makes you think 'cheap' is how Apple wants to be perceived?

Pay more, demand more, get more. Only idiots (or the truly broke) focus on cheap when they're standing in the spotlight. What you really want is value. And given that their stock didn't crater in what is, again, the most sensitive transition imaginable, their non-asshole savvy already paid for itself several times over in the last 48 hours alone.

If you're going to cut corners, play lowball, or just or drive a hard bargain, fine. But be sure you're doing it in places where you can afford to lose he deal.

Or perhaps only idiots start hemorrhaging money just because they're in the spotlight ... ?

In general, perhaps, but in what way does that remark relate - in any way - to the actual situation?

The actual situation seems to be that they're throwing an absurd amount of this guy because they want it to look good.

Look, I'm not an Apple investor and I haven't bought any apple products in the last couple years or so, I really don't care and it's not my business. But with my read on human nature, the guy would do the same exact job for 10 mil a year as he would for 58 mil a year.

If you think Apple is about getting things for cheaper, then you don't understand Apple AT ALL.

Right - because chiseling the incoming CEO is exactly what you want to be doing when the entire world is looking at you for signs of confidence. You've got a market cap that's a third of a trillion dollars, and THIS is how you handle the most sensitive transaction imaginable?

Christ, what total lunacy.

And what if Cook decided this is bullshit, and goes? Then what? That's right, total implosion. And for nothing.

And by the way, since when is 'cheap' a part of anything that Apple does?

I agree. I think pg's equity equation[1] is applicable here. If Tim Cook keeps Apple on the trajectory it's on now, Apple's shareholders will get a great return on this investment.

[1] http://www.paulgraham.com/equity.html

> People need to recognize how grotesque it is that you have a CEO making $160,000 per day, every day.

People need to recognize how grotesque it is that you have a CEO barely being taxed on their income compared to what they would've been taxed during the greatest economic boom of the past twenty years.

I'm an AAPL shareholder, and I support the board's largesse. Pay him more for all I care, as long as he delivers and my stock appreciates. I would love it if the US government would, relative to the current situation, tax the shit out of me and Tim, both.

> enabling Apple to hire better people across the board

I'll make an assertion of my own: I don't think this is true for a second.

Totally agree. I'm guessing that those options are spread over the 10 years, so we're talking roughly $37m a year if the stock remains at the same price. It's just paper money until those options become liquid, and he's working at a big discount when compared to Jobs' 5.5+ million shares from 1997 until today (14 years).

So yeah, taking into consideration that Apple is suddenly working with a CEO that arguably requires less compensation than Jobs, my issue isn't with the amount, but rather how he's taxed and more broadly, the large divide between the top income tax bracket (35%+) and capital gains (15%) which is really terrible, considering that it consitutes an enormous tax loophole for people who earn their income via investments, rather than a traditional wage.

They're not options, they're stock grants, which vest at 5 and 10 years.

Good point, but the issue still stands - it's less stock per year than Jobs' compensation, not taking into account any other standard compensation that Cook will receive. My understanding of a grant is that the stock can be vested or restricted, although I assume that after a 5-year wait it will be vested when Cook receives it, so he'll owe taxes on it.

That's probably why a 5-year period also favors Cook because Apple will be required to withhold tax on the market value of the stock, and it's tricky how that withholding is paid - for cash grants they withhold a percentage of that sum to satisfy the estimated tax, but unfortunately for stock grants, sometimes the grantee is required to pay that estimated withholding to his/her company if they don't have enough cash compensation to offset it. I'm interested to hear how Cook gets around that $100m+ tax liability, but he has 5 years to prepare.

Exactly. Apple seems to have no problem whatsoever hiring the best and brightest. In fact, I'd say it's what they do best, which is saying a lot.

So which is it: either Apple needs to pay people a shit-ton of money to come work for them, or they don't.

Most of the commenters in this thread feel, as you do, that CEOs need to be paid a shit-ton of money, or else they would never work for Apple, but the rank-and-file do not need to be paid a lot of money, because Apple is such a great company to work for. Can you explain the discontinuity? Why is Apple great to work for as a peon, but terrible to work for as a CEO? Why does extra money paid to a CEO definitely and absolutely result in a better CEO, but extra money paid for employees won't get them better employees?

Keep in mind the studies that show highly paid CEOs underperform low-paid ones when you answer.

Apple's software engineering salaries appear to be commensurate with Google's[1]. At the high end, Apple may pay less, but this might be an artifact of having 25% of the data points that are provided for Google.

> Why does extra money paid to a CEO definitely and absolutely result in a better CEO

When did I say this?

> Keep in mind the studies that show highly paid CEOs underperform low-paid ones when you answer.

I'd love to see these studies. I'm very curious to see how these CEOs' compensation packages are structured.

If you go back through my comments from the past week, you'll run into this one: http://news.ycombinator.com/item?id=2907364. Although you didn't mention this, I think it's still relevant to this conversation.

The key difference between Tim Cook and, say, Leo Apotheker is that Tim's been at Apple for 12 or 13 years, and plans to be there for another 10 at least. He's been inculcated in the culture, and still has to answer to one of the co-founders. I doubt Leo lasts longer than three years. What does Leo care if the company's long-term strategic positions are weakened as long as he maximizes his compensation package?

[1] http://www.glassdoor.com/Salary/Apple-Software-Engineer-Sala... and http://www.glassdoor.com/Salary/Google-Software-Engineer-Sal...

This is a symbolic vote of confidence between Tim Cook and Apple more than anything. When you consider the effect on the stock price if there was any uncertainty about the future leadership of the company, this is a bargain.

Besides, that is not his salary or anything. Who knows, he might follow in the tradition of Steve Jobs and take a $1 salary.

Apple is the most valuable company in the world. Why do you find it surprising that it takes hundreds of millions of dollars to retain someone qualified to run such a company? Plus, the position of CEO is arguable the place where Apple is the weakest and companies spend to shore up their weaknesses. In contrast, they don't need to bump pay by 5% to get the best engineers and designers. It's a good use of the money that Apple has and it is amortized over a a decade.

If you think you're worth that extra money, why don't you try asking for it?

Is Tim Cook really worth as much as 580 regular Apple employees? Really?

Steve Jobs sure as hell was. And Tim's job has been to execute Jobs' vision.

People need to recognize how grotesque it is that you have a CEO making $160,000 per day, every day.

Take it to Reddit.

Best. Response. Ever.

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