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Norway's sovereign wealth fund to vote against Apple management's pay plan
- t1E9mE7JTRjf 5y agohttps://web.archive.org/web/20220227182327/https://www.reuters.com/technology/norways-sovereign-wealth-fund-vote-against-apple-managements-pay-plan-2022-02-27/ https://web.archive.org/web/20220227182327/https://www.reute...
- waffle_maniac 5y agoThe question is can someone do the same job as Tim without getting paid as much as him. The answer is yes, obviously. Everyone is replaceable.
- stouset 5y agoThe problem is finding that person and having both high enough and accurate enough confidence in that choice.
- Aperocky 5y agoconfidence is self reinforcing, that's why it's impossible today. Eventually, the replacement may earn the confidence, but it's not today. The only problem is, how much risk are Apple ready to assume for that decision?
- newsclues 5y agoThe risk is, can his replacement not fuck up the profits that apple generates ever quarter. Any change or lack of action can take years to hit the bottom line.
- nickpp 5y agoClassic counterexample being Tim’s predecessor, Steve Jobs who took Apple from the brink and changed it into the most successful company of all time.
- waffle_maniac 5y agoTim’s run at the company has been about building out services and not innovation. Maybe it makes more sense to hire a designer like Ive as CEO.
- Closi 5y agoBuilding out hugely profitable services as the lifecycle of technology refresh slows has been a huge part of Apple’s recent success. Also making huge gambles on things like M1 / Apple Silicon show that Apple is still innovating and leading the way - even in spaces that were starting to be stagnant. Let’s also not forget hugely profitable hardware lines under Tim such as Apple becoming the number 1 biggest watch retailer by revenue, and dominating the wireless earphones market (which it pretty much established itself too).
- dehrmann 5y ago> most successful company of all time I think the Dutch East India Company still holds that crown.
- msoad 5y agoSteve Ballmer enters the chat
- pc86 5y agoSteve Ballmer joining Apple would do for Microsoft's stock price what Steve Ballmer leaving Microsoft did for Microsoft's stock price.
- nopzor 5y agoi think that was more the function of the macro market. much of the foundation for microsoft’s second coming was laid by balmer. basically, i think he gets somewhat of an unfair rap ;-)
- robertlagrant 5y agoIt's certainly true that he was instrumental in their success. If someone else had been in post, it would've happened ten years earlier.
- dareobasanjo 5y agoNo one who worked at Microsoft under Ballmer & Satya believes this. I’m curious as to why people believe that Ballmer who missed every major tech trend, threw good money after chasing competitors and had zero idea how to build build good products “laid the foundation” versus acknowledging Satya’s significant success?
- johnebgd 5y agoBalmer extracted profits out of the established businesses while failing at everything else.
- nopzor 5y agoi never said satya wasn’t an incredible leader. i’ve heard as much from friends who work at microsoft. i just don’t think it’s fair to look at the stock price of microsoft during ballers tenure at microsoft without applying the lens of the broader market.
- JoshTko 5y agoApple's biggest problem is that there is probably no one at Apple today who can replace Tim. The only person with the skillset to replace Tim is Elon, but Elon's temperament is a poor fit for Apple's shareholders.
- ianbicking 5y agoI think the bigger challenge in this case would be finding someone credible. There's lots of people who could do as good a job or better than Tim Cook but how do you know? And not just a fear of the risk but also the difficulty of putting in someone with the credibility to make decisive decisions
- deleted 5y ago[deleted]
- cottager2 5y agoIt sounds like the issue is that the stocks aren’t locked up for some period of years, leading to a situation where Tim Cook could take the money and run.
- CGamesPlay 5y agoThe idea that Cook quits because he doesn’t get a raise somewhat relies on the notion that he can do better elsewhere. Is that true? He’s already at the nation’s wealthiest company.
- marcinzm 5y agoHe's worth 2 billion, he can do many many things to fill his time with that money without needing a day job. Investment, philanthropy, advising, etc.
- waffle_maniac 5y agoMost people don’t make enough to retire until they are in their 60s or 70s. It sounds like we are paying these guys too much if we have to compete for attention with their massive fortune.
- lotsofpulp 5y agoWho is we? Apple’s owners already get to decide how badly they want their executives, what is wrong with this system?
- waffle_maniac 5y agoIt awards people for being something that they cannot possibly be: worth hundreds of millions of dollars per year in compensation. Human excellence hasn't reached the point where this is the case.
- lotsofpulp 5y agoThey were not awarded hundreds of millions of dollars. They were awarded a number of shares or options, which may be worth hundreds of millions of dollars when and if they sell or excercise. Either way, two entities came to a voluntary agreement on an exchange of services and compensation. I have not heard of a better model yet. If the issue is income/wealth gaps in society, then that is better solved by implementing huge marginal income/wealth taxes such that the can be rewarded hundreds of millions of dollars, but they will only end up with a small portion of it.
- jedberg 5y agoIt sounds like their biggest complaint is that the compensation vests too quickly, which means Tim Cook doesn't have an incentive to set Apple up for long term success. They want the vesting to be longer to incentivize him. But given that his net worth is already $2B, most of which is Apple stock, it seems like he's already incentivized to set Apple up for long term success, one because he has so much stock, and two because he's clearly not working for the comp, but for the love of the game.
- seaman1921 5y agoyeah, he probably has enough to just quit regardless of the vesting plan. just sounds like the wealth fund trying to gain some pr.
- matsemann 5y agoWhy would the wealth fund need PR..?
- jedberg 5y agoIf the people of your country perceive the wealth fund as "evil" they tend to revolt, so they need PR to keep the people happy.
- djrobstep 5y agoDrawing a bit of a long bow to consider a trillion dollar fund voting in its own shareholder interests anything other than financially driven.
- nimchimpsky 5y ago[dead]
- seanhunter 5y agoHow would the people of Norway revolt against their own country's sovereign wealth fund? Norway is a very small country with (I seem to remember) the largest wealth fund in the world due to investments of revenue from the oil industry. I highly doubt people there are going to perceive it as evil based on whether or not it's taking a particular stance on Apple's vesting plan. They do have a tradition of taking stances on corporate governance as a matter of principle and this looks like that.
- matsemann 5y agoBtw was just announced that the fund (Oljefondet as it's known as here) will work on withdrawing all investments in Russia.
- croes 5y agoDo they have any investments in Saudi Arabia?
- tordrt 5y agoI don't know if they completely sold all their investments in Saudi Arabia, but they sold down drastically a couple of years ago.
- thatwasunusual 5y agoYou can find an overview over the fund's investments here: https://www.nbim.no/en/the-fund/investments/#/ https://www.nbim.no/en/the-fund/investments/#/
- bruce511 5y agoI know it's topical at the moment, and hey its good PR to take a stand, but frankly it's a tad inconsistent. So their argument is that a nuclear super power invaded a country with little to no provocation, so hey let's make a point and disinvest. So far so good. Definitely a good position to take, and one I agree with. Then again Iraqis are wondering why they are still invested in Apple, a US company...
- Jonanin 5y agoEveryone criticizing the war in the middle east always seems to casually forget that terrorists from this region hijacked airplanes and destroyed the two tallest buildings in the US with them, killing thousands. Did Ukraine do anything like that to Russia?
- rndgermandude 5y ago
- supernova87a 5y agoI think it would be more impressive if investors gave fewer shits about the headline comp packages of a few executives, and instead advocated that Apple pay more attention to how it's no longer creating a place that people want to develop their careers at. Maybe this is just an endemic problem, but it seems to me that big companies have lost the ability/desire to cultivate their own people. Nowadays it's "let people's salaries and career growth stagnate if they choose to stay internal", yet complain when they jump ship to another company that's willing to pay more with a promotion. And at the same time contribute to the problem by being very willing to hire external candidates at salary multiples compared to people from inside, while putting up unreasonable bars for promotion from within. I have yet to see any large company get this formula right. Not to say that I long for the days when you could make a career out of working for GE or something, but you imagine that some respected company (Apple?) could make it so that people wanted to grow and stay with them. Give people responsibility, roles, develop them for a career rather than trying to shortcut it with an external person who looks good but ends up being just talk. Maybe that's impossible nowadays with the pressure to move on to a new product every 3 years.
- thatfrenchguy 5y agoApple is pretty well known when I look at my friends working there, at least in software and hardware engineering, to have people who have been there for a decade or more?
- trhway 5y ago>Nowadays it's "let people's salaries and career growth stagnate if they choose to stay internal", yet complain when they jump ship to another company that's willing to pay more. And at the same time contribute to the problem by being very willing to hire external candidates at multiples of people from inside, while putting up unreasonable bars for promotion from within. such cross-pollination improves overall state of the industry (in particular it optimizes for efficient use of programmers time - burning that time on low productive unnecessary tasks can be done only by either very rich companies or by companies who hire cheap barrel bottom) and results in development of better technical talent at higher wages. As direct participants and beneficiaries we should celebrate it. Just look at the alternative like say lawyers - you have to suck up to your higher-ups for many years before getting any way ahead.
- ed25519FUUU 5y ago> Chief Executive Tim Cook's pay in 2021 was 1,447 times that of the average Apple employee, a company filing on Jan. 7 showed, fuelled by stock awards that helped him earn a total of $98.7 million. They measure the average salary for such a large company? This number seems absolutely pointless to me.
- gsnedders 5y agoIn many countries, total payroll expenditure and total number of employees are both matters of public record. It's often the only figure that's publicly available.
- s1artibartfast 5y agoSome places require reporting it by law so politicians can trot out these ratios.
- onphonenow 5y agoMy question is always exactly how they measure these for stock awards. Elon did some deal that if he pumped Tesla stock up to what seemed to be unbelievable at the time heights and other what seemed like impossible goals he'd make major bank. The target was taking tesla from something like $69B market cap to $650B market cap - he did that and got it to 800B+. So, is his pay valued at the value when he cashes in / gets his bonus, or the value of the bonus at the time of award (much much lower).
- harry8 5y agoApple has made cook a billionaire. The appropriate salary for him is $1. The appropriate additional capital grant is $0. He's a major shareholder, he has wealth at risk both up and down with his and the fate of the company. If he thinks they can't replace him and go as well he has financial incentive to stay. If he thinks they can replace him and go better he only has financial incentive to stay if they pay him ever more every year.
- xiphias2 5y agoThis way of thinking is a great way to ruin a company. After that every employee will think about whether Apple will give them just the minimum so that they don't leave for another company. It's a great way to destroy morale.
- harry8 5y ago2 billion dollars worth of ownership of the company is the minimum? Come on! Every single individual employee will be fired if it is in Apple's financial interest. If Apple have a large number of employees better off somewhere else they have a very, very big problem. It should be stinkingly obvious the rules of the game a quite different when you own 2 billion worth of stock compared to when you're using your paycheck to pay the rent and pay down your debt.
- socialdemocrat 5y agoI don't think you get good leaders if financial compensation is all they care about to stay. I will bet Tim Cook loves what he does at Apple and would likely stay even for $1. He has more than enough money already. A good example is this: Greece and Italy paid their politicians best in all of Europe, while Norway pays their politicians worst. Yet it seems Greece and Italy got stuck with the worst politicians. I don't think that is an accident. With too much focus on compensation, you just attract greedy and corrupt people rather than people who want to make a difference. I do think CEOs should get properly compensated, but the idea that at CEO magically performs 10x better because you pay him $10 million instead of $1 million is so absurd that you have to be a libertarian to believe it ;-) Human motivation cannot be reduced to a simple question of monetary compensation. Research into this suggest that human motivation in relation to compensation works more in terms of inflection points. If your pay is so low you feel underappriciated, you will not perform well. Once salary gets high enough that you feel appreciated, further increases is not going to increase performance. People don't hold back performance until they get paid a billion. There is a threshold at which point people will perform as well as you can expect from compensation alone. Beyond that other facts will matter: Joy of working with your co-workers, belief in the mission, interesting tasks etc.