Apple prices its executive chair at 81 cents on the CEO's dollar

During Cook's 15 years as CEO, Apple's market capitalisation grew from approximately $350 billion to about $4.67 trillion.

The handover to Ternus on Tuesday marked only the second change in CEO at Apple this century.

Apple is paying former CEO Tim Cook a $47 million compensation package as he transitions to the newly created role of executive chairman, comprising a $2 million annual salary and $45 million in planned equity, as reported by the Financial Times on Tuesday.

Apple remains dominant in the global smartphone market but has fallen behind competitors in artificial intelligence, and one of Ternus's biggest challenges will be balancing the company's dependence on Beijing while dealing with acute political pressure from the White House.

Cook's salary decreases from $3 million to $2 million effective later this month, and the Apple board approved a $45 million target equity award for him, half in RSUs that vest over four years and half vesting based on performance.

In an SEC filing, Apple said the current CEO's base salary has been raised to $3 million with a target annual equity award of $55 million in financial year 2027, provided performance criteria are met.

Cook is reportedly taking a 40 per cent cut in pay; his previous compensation package during the 2024 and 2025 fiscal years was around $74 million.

Apple has said the former CEO would assist with several aspects of the company including engagement with policymakers around the world, and Wall Street analysts believe the scale of his package means he is likely to remain actively involved rather than serve as a largely hands-off board chair.

Ternus's appointment came just days before Apple's annual iPhone event on 9 September, at which the company is expected to unveil its first foldable iPhone.

Apple granted Ternus restricted stock units valued at $2.5 million, prorated for the few weeks he will serve as CEO before the end of Apple's 2026 fiscal year.

Three quarters of Ternus's fiscal 2027 equity award will vest based on Apple's total shareholder return relative to other S&P 500 companies; the rest vests on a clock, 12.5% every six months over four years.

There is no word yet on an annual cash bonus for Ternus; Cook collected a $12 million bonus in each of the past two fiscal years according to Apple's securities filings.

Cook's $47m executive chair package is about 84 times Levinson's $557,231 of fiscal 2025 board compensation.

When Cook succeeded Steve Jobs in 2011, Apple gave him 1 million RSUs with a grant date value of $376.2 million on top of a $900,000 salary later raised to $1.4 million, with half the award vesting five years after the award date and half after 10 years.

The Apple board's 2011 pay decision for Cook was described as subjective and was not based on any peer group or formula.

A securities filing on Tuesday shows Ternus holds about 34,000 Apple shares in a trust, worth about $11.1 million at Tuesday's stock price.

Ternus holds seven grants of restricted stock from his years running hardware engineering covering about 305,000 shares worth about $99 million or more, with nearly half performance units that could pay double or nothing, putting the payout range between $50 million and $148 million.

Cook's $47m executive chair package equals 81% of Ternus's $58m of fiscal 2027 salary plus target equity.

If Ternus receives a $12m cash bonus on the scale Cook drew in each of the past two fiscal years, his target total becomes $70m and Cook's package falls to 67% of it.

About $41.25m of Ternus's target equity vests on relative shareholder return against about $22.5m of Cook's, a ratio of roughly 1.8 to one.

Cook's $47m package is about 0.001% of Apple's $4.75tn market value.

A $47m package against a prior package of about $74m is a reduction of 36.5%, not the 40% reported.

Cook's 2011 grant was 0.107% of Apple's then market value of about $350bn, while Ternus's $55m fiscal 2027 target is 0.00116% of $4.75tn, making the 2011 award about 93 times larger relative to company size.