Apple Inc penalized chief executive officer Tim Cook for the iPhone maker’s first sales slump in 15 years with a 15 percent pay cut.
Cook still did extremely well, with a compensation package valued at US$8.7 million for Apple’s fiscal year that ended on Sept. 24, according to a regulatory filing made on Friday. However, the amount was down from nearly US$10.3 million in the prior year.
The Cupertino, California, company cited a downturn in Apple’s revenue and operating profit as the main reason it cut the pay of Cook and its other top executives.
Photo: AP
Apple’s revenue dropped 8 percent to US$216 billion, while its operating profit declined 16 percent to US$60 billion. That was mainly because it sold fewer iPhones for the first time since the device came out in 2007.
It also marked the first time that Apple’s annual revenue decreased since 2001, which was just before the company’s late cofounder and chief executive Steve Jobs unveiled the iPod. That digital music player set the stage for the iPhone and iPad.
Investors have expressed concerns that Apple has become too dependent on the iPhone, a nagging worry that has been aggravated by the company’s inability to introduce another breakthrough product since Jobs’ death in 2011. Cook, Jobs’ anointed successor, had hoped Apple would have another huge hit with a smartwatch unveiled in 2014, but that device has only had moderate success.
Apple’s regulatory filing revealed that the company was bracing for a sales drop last year, although not quite as steep as what occurred. The compensation committee for Apple’s board of directors had established a revenue goal of US$224 billion for last year, which would have been a 4 percent decline from the previous year.
The company expected sales to rebound during the holiday shopping season on hopes that consumers would be snapping up its latest iPhones, the 7 and 7 Plus. Apple is to release its quarterly results that include the holidays later this month.
Separately, Canada’s competition watchdog on Friday announced that it was closing its two-year investigation into whether Apple’s contracts with local wireless carriers illegally stifled competition when it introduced the iPhone.
The probe, opened in December 2014 by the Competition Bureau, failed to find sufficient evidence that the tech giant had engaged in anti-competitive behavior.
“The bureau did not find sufficient evidence to conclude that Apple has engaged in an abuse of dominance under the Competition Act,” the agency said.
The watchdog was investigating whether the contracts were affecting wireless carriers’ incentives to push iPhones over other brands.
Additional reporting by AFP
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