Apple is still one of the most profitable companies in the world but after a tough year that saw a decline in sales and revenue, the Cupertino company has opted to cut the pay of several executives including CEO Tim Cook.
Cook will lose out on about $1.5 million, dropping his annual salary from $10.28 million in 2015 to $8.75 million in 2016. The 15 percent cut was the steepest issued by Apple, Though other executives were also affected. On average, the higher ups at the company saw a 9.6 percent year-on-year reduction in compensation.
In the regulatory filing filed on Friday, Apple revealed it missed its targeted goals for both its revenue and operating income in 2016. It also failed to reach its stretch goals, the first time the company has failed to surpass the goals since 2009.
According to Apple, its annual sales of $215.6 billion fell 3.7 percent below its target of $223.6 billion. The company's operating income came out to $60 billion, falling 0.5 percent short of its targeted $60.3 billion. As a result of falling short, company executives got 89.5 percentage of their targeted annual cash incentives.
Apple struggled to maintain the astronomical sales figures it had previously achieved, seeing movement of its iPhone slide in 2016. The decline from historic highs resulted in the company’s first annual revenue decline since 2001 when it reported earnings in October.
Despite its struggles, Apple is expected to report impressive sales figures when it reports its first quarter earnings in 2017 thanks to its strong holiday sales and the popularity of the iPhone 7 and iPhone 7 Plus.
For Cook, the loss of money likely won't mean much. Apple's CEO voluntarily chose to receive the majority of his compensation in stock, and he netted $100 million in stock bonuses for serving five years as the head of the company. He liquidated a large chunk of his shares in Apple stock in 2016, netting him approximately $65 million, and continues to hold more than a million shares of the company.
Cook announced in 2015 that he plans to give away most of his wealth over the course of his lifetime.