Would the shareholders like to get the former CEO of Hewlett Packard, or Yahoo, or Gateway, or Palm, or jawbone?
If the CEO of the world's first trillion dollar company can't make a lot of money, then who can?
It's a free market.
Isn't this completely contradicted by
> It's a free market.
?
Wouldn't you expect that a company operating on free market principles went for a good but cheap option? Instead when you look at these companies it is always people born rich and well connected. Even better when you include Theranos, you can have a family history of con artists and the people in these circles will still throw money at you for decades. I would say the market for CEOs is about as free as an Italian getting a pair of custom concrete boots by the local mafia.
Edit: Just checked Cook actually doesn't seem to come from a family that rich. So used to it and when I write a comment I manage to refer to the one guy who wasn't born rich.
In an ideal competitive free market, there is no “good, but cheap” option; the marginal cost equals the marginal value delivered.
What unique value does Tim bring to Apple that someone else can’t? Apple has been missing Steve Jobs’ pedantic attention to detail for a while, perhaps Apple would actually be better off with someone else? But they aren’t going to try because they don’t want to spend the effort looking.
Without having invested too much time into this, Microsoft's market cap back then was around $270bn, and the stock rose by around 7% on 2013-08-23, the day is retirement plans were announced. So the stock jumped close to $20bn.
Historical prices according to Yahoo on 2013-08-23: closed at 34.75, previous close was 32.39.
I do not follow that logic. Why should they choose to make less money?
No, I expect it to do what the market can bear. “The market“ can be a single person and single entity, a trade between two market participants where of course, any price is a market-good price.
Good simply meaning a transaction occurred and settled, while bad meaning it did not. Those are my expectations. Doesn't mean thats what I would do or negotiate or whether I would mildly chuckle at what was negotiated.
The fact that Tim Cook ONLY costs 1447 times what an average employee costs is a real bargain.
There are 10s of 1000s of average employees. There was effectively only one Steve Jobs until Tim Cook proved he could be Tim Cook, and as a shareholder I would not want you to try and nickle&dime the guy who has created so much value for shareholders.
Yes, the CEO is the chief value creator because ultimately he decides who remains at Apple, he sets the overall strategy and HE has to take full and final responsibility in front of shareholders for all results good or bad.
Mr Middle Manager or Mr Programmer is not going to be called in by the board to explain any problems with profits or growth. Mr Programmer is important but there are more people that can do his job as well as him, as there are people who have a proven track record running an Apple or similar.
Shareholders that buy Apple stock do so at least in part because Tim Cook is the CEO. Sure I first look at the business fundamentals and the valuation, but Tim Cook's proven track record is a major part.
Go watch Buffet interviews on YouTube to hear how highly he rates Tim Cook.
I've never heard Warren Argue that Tim is overpaid, and yet Warren is a very large shareholder.
It's easy for people with very little stake in Apple to have strong opinions about what the Apple CEO should be paid.
If shareholders buy Apple stock in part because Tim Cook is the CEO and not some new unproven person of dubious merit, how much is he worth paying? A lot
They don't do that now, but it's perfectly within their rights to do so if politics takes a hard left.
I don't see that happening the USA.
Of course the government could tax him heavily - that’s not the question at hand.
How much do you earn? Could you survive if you got paid 15% less? How about 50% less? Well, if you don't need it then, how about we just cut your pay based on what some arbitrary person decides you "need".
As the song says: "Oh Lord, won't you buy me a Mercedes Benz? My friends all drive Porsches, I must make amends"
Back to Apple: if they start to look at 99 Milions $ maybe you shall search for another supplier. Just saying.