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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

January 10, 2012 at 9:40 AM

Did Apple change its core values?

Apple’s new CEO, Tim Cook, has been awarded compensation of nearly $378 million. This is 376 million times the amount made by the late Steve Jobs, who famously worked for $1 a year. To be fair, Cook will take home a $900,000 salary. The remainder is in a one-time award of stock, half of which vests in 2016 and the remainder in 2021. And Jobs held a large amount of Apple stock from the 1990s.

Still, it’s the largest stock award given by the company in a decade and Cook is no Steve Jobs. The latter showed the best in a chief executive, which involved presiding over a fast-moving, innovative, accountable company that kept beating its rivals and expanding market share and value. And make no mistake, this was a culture and list of accomplishments set from the top. Cook will have to work very hard not to become just another American CEO looting the corporate treasury.

Shareholders don’t seem to mind so far; the stock was up in today’s rally. In theory, the compensation is an incentive for Cook to keep lifting the value of the company. But even if he doesn’t, Cook ends up with a tidy paycheck.

Excessive executive compensation has been one of the common denominators of corporate failure in America, not to mention income inequality and disasters such as the housing bubble. It’s usually done with the help of lapdog boards of directors. Apple, which thought different(ly), is now a company to watch. If it’s all downhill from here, the marker won’t be Jobs’ untimely death, but Apple’s embrace of the worse of corporate “values.”

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Comments | More in Corporate governance, Executive compensation, Tech economy

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