John Ternus will receive a base salary of $3m a year as App<\/a>le\u2019s chief executive, roughly 5% of what the company is targeting for his total compensation. The rest is equity, according to a regulatory filing on Tuesday<\/a>, the same day he took over the role.<\/p>\n His fiscal 2026 stock award is prorated to $2.5m for the weeks remaining in the year. For fiscal 2027, his annual equity award has a target value of $55m, although how much he actually receives will depend on his performance.<\/p>\n Three-quarters of that award is tied to Apple\u2019s total shareholder return relative to other S&P 500 companies. The remaining quarter vests over time, with 12.5% paid every six months over four years.<\/p>\n That structure is more interesting than the headline number. Ternus is being measured on whether Apple outperforms the index, rather than simply whether its share price rises.<\/p>\n If the broader market has a strong year and Apple falls behind it, its award gets smaller.<\/p>\n It is also a tougher target than it might initially sound. Apple is one of the largest companies in the S&P 500, so outperforming the index by a meaningful margin means beating a benchmark that already includes a substantial contribution from Apple itself.<\/p>\n Tim Cook\u2019s arrival was structured differently, and eventually became a lesson in executive pay. He received one million restricted stock units worth $376.2m in 2011 with no performance conditions, then asked in 2013 for conditions to be added.<\/p>\n Ternus is starting with the model Cook eventually adopted. The performance-linked structure Cook voluntarily introduced is now the default, which is the kind of governance change that can take a decade and an embarrassing headline.<\/p>\n Cook is not disappearing from Apple\u2019s payroll. As executive chairman, he will receive a $2m salary from September 26 and a fiscal 2027 equity award targeting $45m, which is not obviously a smaller package based on the numbers alone.<\/p>\n Bloomberg puts the two packages at $58m for Ternus and $47m for Cook. Those figures are targets, not guaranteed payouts, and the equity portion of both depends on performance that has yet to happen.<\/p>\n For comparison, Cook\u2019s total compensation for fiscal 2025 was $74.3m, including $57.5m in stock awards. His new package is smaller, but only by about a third.<\/p>\n European readers have a direct interest in what Cook\u2019s new role involves. His remit as chairman includes engaging with policymakers around the world, which in practice means regulators.<\/p>\n Apple faces the Digital Markets Act, antitrust proceedings in several jurisdictions and a trade environment that can change from one month to the next.<\/p>\n Paying $47m for that role says something about where Apple sees its risks. It is also an unusual arrangement, keeping a former CEO on a package that remains close to that of the person running the company.<\/p>\n The handover itself happened on Tuesday, with Cook\u2019s final memo to staff followed by a series<\/a> of executive changes. The filing arrived the same day, which is efficient and slightly unromantic.<\/p>\n Ternus already has plenty of exposure to Apple\u2019s performance. He holds roughly 34,000 Apple shares worth about $11.1m, along with seven restricted grants covering around 305,000 additional shares, worth somewhere between $50m and $148m depending on how the performance conditions play out.<\/p>\n Executive pay at this level is a governance signal rather than a household expense. Nobody at Apple is choosing between $50m and $148m based on personal need, and the board knows that. That is why the structure matters more than the headline figure.<\/p>\n The range captures the compensation philosophy neatly. The gap between $50m and $148m is what the board is asking Ternus to close, and it depends on how Apple performs against its peers rather than on any single decision he makes.<\/p>\n He also inherits the AI problem TNW has been documenting through the transition, alongside a dropped net cash neutral target that gives Apple more room to pursue acquisitions. The pay structure suggests the board expects him to use it.<\/p>\n<\/p><\/div>\n If you liked the article, do not forget to share it with your friends. Follow us on\u00a0Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n If you want to read more like this article, you can visit our Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n\n
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