There are probably many adequate CEOs already within Apple, making average compensation. You seem to believe CEOs are minted; they all move up the ranks like the rest of us. If the skills are there to lead a company, investors don't care what their last pay scale or job title was and trust the Board or Directors in who is appointed.
Is a software engineer really that valuable than a hourly retail wager? You know the answer to that question because of your craft. Similar skill and perspective gaps exists between c-suite and associate employees.
As COO, Tim was responsible for reorganising Apple's supply chain. Before him, Apple had awful execution and would regularly overproduce some models that would end up unsaleable, while having shortages of other models. I'm pretty sure this was a substantial factor of the operating losses of the 1990s.
Under Tim, this changed radically. Initially Apple solved the problem by drastically reducing the number of different models, but by the time the company managed to produce iMacs in 5 different colours without noticeable misproduction of numbers, it was evident that it it had become much better at execution. And around that time, Apple also started turning a profit again.
So I'd argue that Tim may have been one of the key drivers of Apple's profitability. I'm not sure how much value he added over a hypothetical replacement level COO, but empirically, he was an enormous improvement over his predecessors.
So his big insight that makes him worth 1400x the average employee was "We make more of these phones than we sell and less of those other phones than we could sell, let's do something about that"?
If executive pay packages are based on their value to the company, why do they keep increasing so much faster than wages? How have CEOs continuously become more and more valuable relative to workers over the previous 50 years?
"In 2020, the ratio of CEO-to-typical-worker compensation was 351-to-1 under the realized measure of CEO pay; that is up from 307-to-1 in 2019 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989."[0]
Apple is worth 3 trillion dollars; The stock has surged over 1,000% since Cook took charge. Is it really surprising that he took home 100 million? It pales in comparison to Musk's $250B. If he can increase the stock value just 0.01% it pays for his entire compensation package 3x over.
Companies are larger? If the CEO used to earn 1% of cumulative salary of all workers, and now they earn 0.5% but there's 4x as many workers, that's still a 2x increase. Why would you expect entry level workers wages to increase in proportion to company size?
The value of oxygen is incredibly high, but the supply makes it priced low.
Almost by definition, the higher the value of an executive, the lower the supply.
As companies get bigger, the executives are able to add more value. If you have an executive leading the largest company,(i.e. Apple valuation wise), they have the largest ability to add value. And what is the supply for that? So far only one person, the current CEO, has experience. This creates a very limited supply where the pay matches the value created closer than in the vast majority of professions.
Don't step over dollars to chase pennies. If we were to filter people by their previous experience on running a 2.8t dollar company, or growing a company to 2.8t dollars, then Tim Cook is the only person that qualifies.
Apple made 94.68 billion while paying Tim Cook 98 million. They paid him 1/1000th of their profit. If Apple knew someone else could do 10% better than him, they would very gladly replace him and could even pay his replacement ten times more. Ten percent more of 94 billion would be 9.4 billion, while the replacement would make 1 billion.
I don't know if you are a software developer, but often they will look "up" at people making more than them and claim that they make too much, without looking around understanding that no company pays new grads $200k out of the kindness of their heart. The answer to why anyone makes as much as they do is simply because the market allows them to capture that much of the value they create. Emotions and comparisons are not relevant.
Okay, not defending his pay here, but 1,400 median employee salaries is not that crazy. First, think about the valuation of Apple since Tim took over. Yes, it's not all attributed to him, but he has definitely made some very good decisions along the way, despite being set up with a money printer. Secondly, for every successful CEO package, there are hundreds of others that you don't hear about because they failed to meet goals laid out in their compensation package. Finally, these compensation packages are set up a few years before with targets that the company needs to meet.
> Secondly, for every successful CEO package, there are hundreds of others that you don't hear about because they failed to meet goals laid out in their compensation package
Are there any notable examples of a CEO missing a target and getting paid less than they could have?
Are we asking how do we know when companies fail, or how do we know whether committees set executive compensation based on targets?
Executive compensation for public companies is actually public -- shareholders vote on it every year in the proxy filings. This is sometimes called "Say on Pay"
if a union of worker co-ops were to pool money, buy enough shares in a public company like apple (say 50 billion dollars worth), could they vote on Tim Cook's salary to never exceed 1 million?
1400 suggest these corporations are far too large.
It means that there a tiny elite which have the power to buy out everything away from the worker class, be that essentials like housing or luxuries like concert or sports tickets. If concert tickets were priced by the "free market" alone then typical workers simply would never be able to afford them as evidenced by the amount of scalping that happens.
When you have a small powerful elite which can price out the average person from whole markets entirely you have a really broken system.
I think the system is somewhat democratic. This is what the board of directors chose as his compensation and they themselves are elected. Remember, that Apple is extremely large. These median salaries probably include retail store employee packages as well. If you look at just engineering, product, design salaries, the x factor here probably comes down to a factor of 10, so 140 instead of 1400.
why should retail store workers make less than developers? Hours are hours time is time. People should be valued by willingness to work, maybe a small multiplier for a degree, but CEO's definitely need a pay cap, if the max he could earn is say 500x average salary, well guess what if the average salary increases by x percent he could end up making the SAME as he does now, except everybody else makes out like bandits too... or maybe he only makes the equivalent of 1000x now, but still 500x but the average wage is the equivalent where 1000x before is 500x now..etc...
It's a completely different skill that you need to bring to the table. A retail employee just requires a week or so of training vs. a four year college degree (or similar experience) for an engineering job. Similarly, the skill that a good CEO brings to the table is equally as different. The article also mentions that his compensation in 2020 was like 4x lower, so that's interesting.
That's not true. How long would it take a random person off the street to be good enough to work as a developer at Apple? How long for a retail store worker?
The difference is years. The difference limits supply for good developers, and since the demand is also high, their labor is more expensive to buy than retail store workers.
Limiting CEO pay to some multiplier is fine, but we don't have to pretend that everyone's labor should be similarly valued.
How long would it take a random person off the street to be good enough to work as a developer at Apple?
If they had rich parents and didn't have to work at Apple to just survive, probably not long at all. They'd easily do it. The only reason they aren't successful is because of poverty.
It's been hashed out between Paul Graham and the cloudflare ceo (iirc) that not anybody can build a company because true success requires having rich parents or supports you can fall back on while you're building prototypes and side businesses...
>Oh Paul, you know better. I had to borrow money from my mom to pay my taxes when we were starting Cloudflare. But I certainly came from a relatively privileged background, and so did the AirBnB founders. It’s hard to take risks if you don’t have a safety net.
source: https://twitter.com/eastdakota/status/1129929178382446592
Again given everybody starts at the same beginning starting line, then sure we can begin valuing people based on credentials, etc... but since we don't have a society like that....hours are the only equal output a person CAN give, and maybe a better measurement of their work ethic and value to society.
society would kinda suck if I couldn't order a pizza because nobody wants to work shit wages....I value them, but I can't afford to personally pay them more than the cost of goods and maybe a tip... it's on the company and society to form unions and supports to ensure that they can lead happy lives without having to (because some don't want to) go through further schooling and education.
When you're working 2 jobs and 80s per week and still can't own your own car, it becomes a big endeavor just to not decide to end it all after 10 or 20 years of that... it's grueling and miserable.
Personally I think the only solution is re-building the strong unions of the 30s and 40s... but that's gonna take a long time to get right.
Corporations like Apple have inherent economies of scale though - all the engineering cost of developing the latest iPhone is spread across all the devices sold, and the cost of developing something like Apple Silicon is spread across every device they make and sell. Saying that corporations that big shouldn't exist is effectively equivalent to saying modern technology shouldn't exist. Like, I know the whole argument that people who complain about this but own an iPhone gets a lot of flak, but in this case the thing being complained about and the existence of devices like iPhones is fundamentally intertwined; one enables the other.
Put another way. If there are 10 levels between him and those who are at the lowest level of hierarchy (assuming the median employee is somewhere in the lowest rung of this org tree), this equates to roughly your comp doubling as you get promoted each level.
Then is it fair to question whether this ratio of comp between successive levels is ok?
Possibly more relevant: if you took someone off the assembly line and put them in charge ten years ago, would the company perform worse by at least the value of Tim Cook's compensation over that period?
Impossible to know for sure (can't A/B test history), but my guess would be "probably".
No one on here is speaking from experience. Are you expecting only replies from multi trillion dollar company CEOs? Let's try to keep the gatekeeping down. Pretending only multi-trillion dollar company CEOs opinions are the only ones that count is dishonest.
No I don't think he is the CEO of a multi trillion dollar firm, hence why I find his absolute statement about the simplicity of such an occupation peculiar.
I'd guess that if you took a group of people on some of the the lowest totem poles at Apple and had them replace the entire C-Suite, Apple's output would certainly crater. Probably to bankruptcy (though it might take a while, Apple has huge cash reserves).
Replacing one individual from the C-Suite could maybe get carried by the rest.
And yes, the other way would work fine. Having the C-Suite take over an individual store would be fine.
I very much doubt the C-Suite could take over a busy store with no training and run it. Customer interactions require skill. Knowing how the register works or how to order more inventory requires training. I have no doubt they could do it with proper training.
I also have no doubt that if you took a random apple store employee and gave them Tim Cook's education that they could be a passable CEO.
Tim Cook's education? Are you saying they'll all spend 12 years at IBM, ending at the director level while getting their MBA at Duke, then spend time being a COO and VP at other companies, and then finally replacing Tim Cook?
Ok fair.
I think comparing that to a few weeks of training to run a store is wild.
The headline literally compares them though. Tim Cook is paid 1400x the average worker.
Do you think someone working in an Apple store would rather be there than getting an MBA at Duke? or being COO somewhere? Tim Cook was incredibly privileged to get the education and opportunities that he did. I'm not saying he wouldn't be a better CEO than most, but most people don't get to try so we don't know that fact. He's absolutely not 1400x times better than people with similar education. Even Apple isn't doing that well. If luck had him become CEO of IBM instead of Apple we wouldn't be praising him as "extraordinary" just because of circumstance.
I mean, sure, but we have to recognize that the path to getting the education/skills was not fair. MBA programs only let in so many people (and certain types of people, if we're being honest). Only so many C-Suite positions exist for you to get management experience in. Getting selected for these opportunities requires luck as much as skill.
If you want to talk about compensation like a "fair market" and that there's only 1 Tim Cook so per the rules of supply/demand he can charge a ton for his services, then we have to also acknowledge that the market to acquire those skills is unfair. You cannot base a fair market on the output of an unfair one, they are both unfair. Tim Cook's compensation is unfair.
> If you want to talk about compensation like a "fair market" and that there's only 1 Tim Cook so per the rules of supply/demand he can charge a ton for his services
Yes, I agree with this.
> The market to acquire those skills is unfair
So far so good. I agree with this. This is why I try to vote for people who support expanding access to education, for example.
> You cannot base a fair market on the output of an unfair one, they are both unfair. Tim Cook's compensation is unfair.
This is where you lose me. You can't connect the two like that. The unfair path to get to the position of CEO is a separate conversation to what that compensation should be to be considered fair.
Why would they need that? They already have the job and could easily pay a MBA Duke grad for advise if needed which probably isn't. 12 years at IBM ending up as director advise could be bought but not sure how important it is. All other CEOs don't share that experience and get on fine without it.
The C-Suite includes the SVP Retail, and I trust that she could manage the basics of running a store. Tim himself has take occasional shifts in stores, as far as I know, and the technical SVPs should have the skills to staff the genius jobs — Craig Federighi definitely also would have the interpersonal skills.
As for your second paragraph, keep in mind that there was a string of highly qualified CEOs who tried and failed to run Apple when it was a far smaller company — Sculley, Spindler, and Amelio were no dummies.
Also I don't understand the instinct to make these kinds of comparisons. Apple also offers food to its employees. Can Tim Cook cook? It's such a stupid question. We don't expect that any employee can jump into any role anywhere.
Tim Cook can't make and sell iPhones by himself. The C-Suite can't do it by themselves. Management can't do it. The designers can't do it. It's not until you consider the whole team, including store employees and assembly line workers that Apple can produce iPhones. It takes the WHOLE team.
Why is 1 member of a team of people who all have to work together to achieve their shared goal paid 1400x more than average? Does that seem fair?
First of all, the 1400x is a miscalculation, because it attributes a sum to be earned out over many years to a single year.
Yes, it takes tens of thousands of people to design, make and sell Apple's products. Tim would be the first to acknowledge that. Does this mean that each of them is equally valuable to the company and equally hard to replace? No. (Which is not a statement about their worth as _human beings_, mind you).
This may seem slightly pessimistic, but I'd guess that C-suite folks have enough connection with the goals, vision and details of the business to feel like they are connected to day-to-day events -- including an ability to speak about them confidently -- and perhaps even get involved with daily activities from time to time, although their (operational) value-add is completely and perhaps necessarily completely disconnected from the transactional business fundamentals.
What we have going on here, I think, is a set of businesses which typically have (at minimum) two tiers - the "network tier" where your value is your personal connections, education, wealth and power: highly leveragable into success of a single or multiple businesses that you sit with, and the "production tier" - people who actually do the f'ing work of turning the network tier's demands into something that resembles it in reality.
Businesses that don't have both aren't likely to thrive.
Resulting questions: what are the true directional dependencies between those two groups, and how do they each sustain them? Could that be made healthier for all participants?
I have no doubt that this has probably already been explored by economic philosophers in other, more precise terms: this is just my naive attempt to put the patterns into my own words.
(in hindsight I feel a bit like this was an apologist/acceptance-of-the-facts kind of comment. I don't think it's a great situation, and I'd love to discover that in fact, Tim Cook assembles 50x as many iPhones per day as the typical Wistron employee, or locks his office door and cold calls promising app developers for 30 hours a week on a gradually ramp-increasing success quota, but my sense is that it's unlikely to be the case. It's more likely, I expect, smooth talk, an unflustered manner, and pressure applied to people who are expected to deal with problems and won't retain their jobs if they don't)
Honestly anybody in this position would be a fool not to take on advisers and consultants and they'd have access to the money for that. A business advisor/tutor could basically give them an MBA equivalency in like 3-4 years and they'd be just as good as Tim Cook.
Well this is the average Apple employee. I wonder how much he makes compared to the lowest paid employee. 10,000x?
Replace the entire c-suite with no one and the division leaders below will fill the space which would probably end up with a better product. Replace them with the lowest paid (do the Chinese kids working in the factories count? If not 18 year old factory worker in Wuhan would) they will be quickly running the place with a group of friends who know what 18 year olds likes.
This would boost revenue per share because you remove all c-suites.
Csuite replaces frontline workers, and vice versa...the workers can use a shark-tank like group of business people as advisers (because anybody in this sort of position would be a fool NOT to reach out to people who know what they're doing --at least for the start of things) ...then see how much things change.... keep the experiment going until it's deemed the company is losing too much value, etc.. profits from the reality show could make up some of that loss perhaps.
yeah, the reverse would be a much better show...watching some real employees at the ground level actually improve the profit of the company would be pretty insane.. like imagine they raised everybody's wages 5% and gave themselves a paycut as CEO big enough to equal/balance that out. Then productivity skyrises, and it just proves that higher wages is actually the #1 thing you can do to raise productivity, and that company culture/morale play a big role in success.
> Then productivity skyrises, and it just proves that higher wages is actually the #1 thing you can do to raise productivity, and that company culture/morale play a big role in success.
Or payroll ends up being too expensive when they have a down quarter and they have to deal with layoffs.
Most likely he wouldn't.
The second statement is false equivalence. The equivalent comparison would be "if you took someone from the assembly line and make them CEO, would Apple's cost grow 1000% in ten years?"
No kidding. Apple has added $2,500,000,000,000 to it's market cap since Tim Cook took over in 2011. If you think "anyone could do that" then I don't really know what to say.
So you assert that moving Tim to another company would see that company grow as the same rate?
Steve Jobs setup Apple with so much success that I would have given half of Tim's salary to Steve's estate and still felt that we are ripping off of Steve.
Tim Cook is a caretaker CEO who didn't add that value himself. He was smart enough not to do anything to take Apple off of the path it was on but lacks vision. Apple sits on boatloads of money that could have been used to secure a key vertical in the future.
> So you assert that moving Tim to another company would see that company grow as the same rate?
No, never said anything of the sort.
> Tim Cook is a caretaker CEO who didn't add that value himself.
The market cap begs to differ. He is far from the product visionary that Steve Jobs was but he is great at execution. There is a reason Jobs picked him as his successor.
Nit: Isn't this number taking into account stock that vested this year from a multi-year cliff, and stock appreciation that happened during that time? If so, seems misleading to not amortize it over the period of the grant.
That's not really a nitpick, it's bad faith. That stock was granted when he took over as CEO and had two vests at 5 years and 10 years. He'd been "earning" it all along and should be amortized over the term, even if for tax purposes it's not.
> Reporters and editors still equating average and median.
Median is an average and usually the most relevant average, in the cases where you don't have a distribution where the main averages (median, arithmetic mean, and mode) are all the same.
>Median is an average and usually the most relevant average, in the cases where you don't have a distribution where the main averages (median, arithmetic mean, and mode) are all the same.
Huh?
I can assure you Apple can darn well calculate the median and average salary for its employees.
I think OP meant that the mean is a type of “average”.
In casual speech we equate “mean” to “average” but the word average actually denotes a class of central tendencies that include the mean, median etc. Yes it’s a semantic point but just wanted to provide some context.
And it was part of a multi year vesting cliff. He earned 'only' $14m in 2020, so they cherrypicked one particular year that had a very high vesting event to make this seem more egregious than perhaps it is. Really, the stock comp should be amortized over the whole vesting period.
In total, he earned $98.7 million, compared with $14.8 million in 2020.
In September, Cook received 333,987 restricted stock units, in his first stock grant since 2011 as part of a long-term equity plan.
"CEO received first stock grant worth $55M in a decade after the company adds $2.5T in market cap in that same time period"
"Tim Cook’s triumph as Jobs’ successor has been so unparalleled that the numbers don’t speak for themselves so much as they scream: Apple’s market value has grown by more than $700m a day from when Cook took over in August 2011 to this week when it struck $3tn, before falling back."
I think 1/7th of one day's market appreciation for ten years' work is fair.
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[ 5.3 ms ] story [ 184 ms ] threadhttps://www.quora.com/What-happened-to-the-Apple-stocks-when...
Under Tim, this changed radically. Initially Apple solved the problem by drastically reducing the number of different models, but by the time the company managed to produce iMacs in 5 different colours without noticeable misproduction of numbers, it was evident that it it had become much better at execution. And around that time, Apple also started turning a profit again.
So I'd argue that Tim may have been one of the key drivers of Apple's profitability. I'm not sure how much value he added over a hypothetical replacement level COO, but empirically, he was an enormous improvement over his predecessors.
And it was not that insight. Lots of people knew that. But not a lot of people had the skill to "do something about that".
"In 2020, the ratio of CEO-to-typical-worker compensation was 351-to-1 under the realized measure of CEO pay; that is up from 307-to-1 in 2019 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989."[0]
[0]: https://www.epi.org/publication/ceo-pay-in-2020/
As companies get bigger, the executives are able to add more value. If you have an executive leading the largest company,(i.e. Apple valuation wise), they have the largest ability to add value. And what is the supply for that? So far only one person, the current CEO, has experience. This creates a very limited supply where the pay matches the value created closer than in the vast majority of professions.
Apple made 94.68 billion while paying Tim Cook 98 million. They paid him 1/1000th of their profit. If Apple knew someone else could do 10% better than him, they would very gladly replace him and could even pay his replacement ten times more. Ten percent more of 94 billion would be 9.4 billion, while the replacement would make 1 billion.
I don't know if you are a software developer, but often they will look "up" at people making more than them and claim that they make too much, without looking around understanding that no company pays new grads $200k out of the kindness of their heart. The answer to why anyone makes as much as they do is simply because the market allows them to capture that much of the value they create. Emotions and comparisons are not relevant.
Are there any notable examples of a CEO missing a target and getting paid less than they could have?
Executive compensation for public companies is actually public -- shareholders vote on it every year in the proxy filings. This is sometimes called "Say on Pay"
1400 suggest these corporations are far too large.
It means that there a tiny elite which have the power to buy out everything away from the worker class, be that essentials like housing or luxuries like concert or sports tickets. If concert tickets were priced by the "free market" alone then typical workers simply would never be able to afford them as evidenced by the amount of scalping that happens.
When you have a small powerful elite which can price out the average person from whole markets entirely you have a really broken system.
That's not true. How long would it take a random person off the street to be good enough to work as a developer at Apple? How long for a retail store worker?
The difference is years. The difference limits supply for good developers, and since the demand is also high, their labor is more expensive to buy than retail store workers.
Limiting CEO pay to some multiplier is fine, but we don't have to pretend that everyone's labor should be similarly valued.
If they had rich parents and didn't have to work at Apple to just survive, probably not long at all. They'd easily do it. The only reason they aren't successful is because of poverty.
It's been hashed out between Paul Graham and the cloudflare ceo (iirc) that not anybody can build a company because true success requires having rich parents or supports you can fall back on while you're building prototypes and side businesses...
>Oh Paul, you know better. I had to borrow money from my mom to pay my taxes when we were starting Cloudflare. But I certainly came from a relatively privileged background, and so did the AirBnB founders. It’s hard to take risks if you don’t have a safety net. source: https://twitter.com/eastdakota/status/1129929178382446592
Again given everybody starts at the same beginning starting line, then sure we can begin valuing people based on credentials, etc... but since we don't have a society like that....hours are the only equal output a person CAN give, and maybe a better measurement of their work ethic and value to society.
society would kinda suck if I couldn't order a pizza because nobody wants to work shit wages....I value them, but I can't afford to personally pay them more than the cost of goods and maybe a tip... it's on the company and society to form unions and supports to ensure that they can lead happy lives without having to (because some don't want to) go through further schooling and education.
When you're working 2 jobs and 80s per week and still can't own your own car, it becomes a big endeavor just to not decide to end it all after 10 or 20 years of that... it's grueling and miserable.
Personally I think the only solution is re-building the strong unions of the 30s and 40s... but that's gonna take a long time to get right.
If one developer automates a task previous done by 10 staff, they are more valuable than those 10 staff.
Could Tim Cook be more valuable that 1400 staff? Easily.
If you don't like it, become more valuable.
Is he worth 1,400x? Let's rephase this...
You can have 1,400 Apple employees or Tim Cook.. I would rather have those employees. But maybe Tim can do the work of 1400
Apple of 2020 and even 2010 is much different from Apple of 2000 or 1995.
Getting rid of the founder has huge issues but getting rid of the other CEO happened too late.
1) Let's say we rid Cook and add 1,400 more employees, we would arrive at an Apple with 155,399 employees and no Cook.
2) Let's say we rid 1,400 employees and get another Cook. We would arrive at an Apple with 152,601 employees including an additional Cook.
I would argue Apple in either 1) or 2) would have similar outcome for another decade. However 1) would likely support more families. I like 1).
Then is it fair to question whether this ratio of comp between successive levels is ok?
If you took someone off the assembly line and make them CEO, would Apple's output crater to 1/1400th of what they produce today?
Impossible to know for sure (can't A/B test history), but my guess would be "probably".
Being an extraordinary CEO is very difficult.
Ironically I want to be a CEO but of a worker-coop that has a cap on pay, union-built in, and flat management style... read: ethical CEO.
Replacing one individual from the C-Suite could maybe get carried by the rest.
And yes, the other way would work fine. Having the C-Suite take over an individual store would be fine.
I also have no doubt that if you took a random apple store employee and gave them Tim Cook's education that they could be a passable CEO.
Ok fair.
I think comparing that to a few weeks of training to run a store is wild.
Do you think someone working in an Apple store would rather be there than getting an MBA at Duke? or being COO somewhere? Tim Cook was incredibly privileged to get the education and opportunities that he did. I'm not saying he wouldn't be a better CEO than most, but most people don't get to try so we don't know that fact. He's absolutely not 1400x times better than people with similar education. Even Apple isn't doing that well. If luck had him become CEO of IBM instead of Apple we wouldn't be praising him as "extraordinary" just because of circumstance.
I'd wager that 80% of the English speaking adult US population could be trained to work in an Apple store and do fine within a few weeks.
If you want to talk about compensation like a "fair market" and that there's only 1 Tim Cook so per the rules of supply/demand he can charge a ton for his services, then we have to also acknowledge that the market to acquire those skills is unfair. You cannot base a fair market on the output of an unfair one, they are both unfair. Tim Cook's compensation is unfair.
Yes, I agree with this.
> The market to acquire those skills is unfair
So far so good. I agree with this. This is why I try to vote for people who support expanding access to education, for example.
> You cannot base a fair market on the output of an unfair one, they are both unfair. Tim Cook's compensation is unfair.
This is where you lose me. You can't connect the two like that. The unfair path to get to the position of CEO is a separate conversation to what that compensation should be to be considered fair.
As for your second paragraph, keep in mind that there was a string of highly qualified CEOs who tried and failed to run Apple when it was a far smaller company — Sculley, Spindler, and Amelio were no dummies.
Tim Cook can't make and sell iPhones by himself. The C-Suite can't do it by themselves. Management can't do it. The designers can't do it. It's not until you consider the whole team, including store employees and assembly line workers that Apple can produce iPhones. It takes the WHOLE team.
Why is 1 member of a team of people who all have to work together to achieve their shared goal paid 1400x more than average? Does that seem fair?
Yes, it takes tens of thousands of people to design, make and sell Apple's products. Tim would be the first to acknowledge that. Does this mean that each of them is equally valuable to the company and equally hard to replace? No. (Which is not a statement about their worth as _human beings_, mind you).
What we have going on here, I think, is a set of businesses which typically have (at minimum) two tiers - the "network tier" where your value is your personal connections, education, wealth and power: highly leveragable into success of a single or multiple businesses that you sit with, and the "production tier" - people who actually do the f'ing work of turning the network tier's demands into something that resembles it in reality.
Businesses that don't have both aren't likely to thrive.
Resulting questions: what are the true directional dependencies between those two groups, and how do they each sustain them? Could that be made healthier for all participants?
I have no doubt that this has probably already been explored by economic philosophers in other, more precise terms: this is just my naive attempt to put the patterns into my own words.
Replace the entire c-suite with no one and the division leaders below will fill the space which would probably end up with a better product. Replace them with the lowest paid (do the Chinese kids working in the factories count? If not 18 year old factory worker in Wuhan would) they will be quickly running the place with a group of friends who know what 18 year olds likes.
This would boost revenue per share because you remove all c-suites.
Csuite replaces frontline workers, and vice versa...the workers can use a shark-tank like group of business people as advisers (because anybody in this sort of position would be a fool NOT to reach out to people who know what they're doing --at least for the start of things) ...then see how much things change.... keep the experiment going until it's deemed the company is losing too much value, etc.. profits from the reality show could make up some of that loss perhaps.
Or payroll ends up being too expensive when they have a down quarter and they have to deal with layoffs.
Suddenly this show seems like a horrible idea.
Steve Jobs setup Apple with so much success that I would have given half of Tim's salary to Steve's estate and still felt that we are ripping off of Steve.
Tim Cook is a caretaker CEO who didn't add that value himself. He was smart enough not to do anything to take Apple off of the path it was on but lacks vision. Apple sits on boatloads of money that could have been used to secure a key vertical in the future.
No, never said anything of the sort.
> Tim Cook is a caretaker CEO who didn't add that value himself.
The market cap begs to differ. He is far from the product visionary that Steve Jobs was but he is great at execution. There is a reason Jobs picked him as his successor.
Conversely, putting Tim Apple on a cash register would just slow down 1 cash register.
Median is an average and usually the most relevant average, in the cases where you don't have a distribution where the main averages (median, arithmetic mean, and mode) are all the same.
Huh?
I can assure you Apple can darn well calculate the median and average salary for its employees.
> fueled by stock awards that helped him earn a total of nearly $100 million.
It was overwhelmingly stock, not direct pay.
https://www.npr.org/sections/money/2018/06/22/622646316/epis...
2) From https://www.ft.com/content/17ecb0a0-8e60-4d02-b1fc-f497c9e31... [paywall]:
"Tim Cook’s triumph as Jobs’ successor has been so unparalleled that the numbers don’t speak for themselves so much as they scream: Apple’s market value has grown by more than $700m a day from when Cook took over in August 2011 to this week when it struck $3tn, before falling back."
I think 1/7th of one day's market appreciation for ten years' work is fair.