Declining iPhone Sales in 2016 Result in Pay Cuts for Apple’s Executives including Tim Cook

With sales of Apple’s flagship product, the iPhone, experiencing a downturn for the first time in 13 years – a significant blow to CEO Tim Cook since his appointment in 2009. While Apple’s other services such as iTunes, the App Store, iCloud, and Apple Music have attempted to counterbalance this loss, it was an insurmountable task to drastically improve the company’s financial standing.

This decline inevitably led to accountability and at the receiving end of the blame this time are the CEO and other top-ranking officials of the company. As per a new filing at the SEC, Tim Cook’s compensation suffered a reduction of approximately $1.5 million in 2016 in contrast to the $10 million he earned in 2015. His overall earnings amounted to $8.74 million in 2016. This came as Apple’s share of the smartphone market continued to dwindle, even as iPhone 7 launched in the third quarter of the same year.

In the aforementioned report, Apple announced that “Our 2016 performance with regards to net sales and operating income were 7.7% and 15.7% below our record-breaking 2015 levels. This considerably impacted the annual cash incentive payouts for our named executive officers for 2016, which were considerably less than that of 2015, reflecting our in-depth pay-for-performance alignment.”

While one might automatically assume Tim Cook was the highest earner in Apple, CFO Luca Maestri, head of retail Angela Ahrendts, hardware Chief Dan Riccio, and internet software and services head Eddy Cue, as well as general counsel, all brought home $22 million each.

It’s important to note that despite this setback, CEO Tim Cook landed a windfall of $135 million earlier in the year by selling 1 million restricted stock units to common shares. Furthermore, Tim Cook has previously announced his intentions to donate his entire fortune (worth about $750 million as per a 2015 report), after covering his nephew’s educational expenses.