Apple said in its filing: "Our 2016 performance with respect to net sales and operating income was 7.7% and 15.7% below our record-breaking 2015 levels; however, the 2016 payouts to our named executive officers were significantly less than the annual cash incentive payouts for 2015, reflecting strong pay-for-performance alignment".
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.
Apple experienced its first revenue fall since 2001, and the immediate outcome was a payment drop for its chief executives, the company reported on Friday. This resulted in Cook's cash bonus falling to $5.4 million in 2016, down from $8 million the year before. Cook's base salary is set at $3 million, while the other executives' base pay is $1 million.
The filing reveals Apple CEO Tim Cook made $8.7 million in 2016, down from $10.3 million in 2015 and $9.2 million in 2014.
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Incentive payout targets compared to Apple's 2016 numbers.
Apple struggled to maintain the astronomical sales figures it had previously achieved, seeing movement of its iPhone slide in 2016. However the base salary of CEO rose 50 per cent, up to $3 million.
In its annual filing with the SEC, Apple Inc reported that its CEO was hit with a 15 per cent pay cut a year ago. The company's earnings call for the first quarter of fiscal 2017 will happen on January 31, and the company has projected revenue between $76 and $78 billion, slightly beating the $75.9 billion it earned in the first quarter of 2016. Apple's sales of $215.6 billion were lower than its $223.6 billion target, while its operating income of $60 billion narrowly missed its $60.3 billion goal. Sales of iPhones, as a result, also declined in the last three quarters. It marks the 10th anniversary of the device, and rumors suggest Apple has big plans for the next iPhone, which should launch in the fall. Last year, he received $65 million worth of shares in a promotion award. Mr. Cook sold $36 million in shares and forfeited another $71 million to cover taxes, according to a filing in August.