Apple CEO Tim Cook didn't really make $378 million in 2011

His salary was $900,017. His 401(K) grew by $14,700. To get the rest he has to stick around

Cook. Photo: CNET

Was Tim Cook really the highest-paid CEO of 2011, as the Associated Press and others suggest? Only if you believe a bird in the bush is worth as much as a bird in the hand.

According to the proxy statement Apple (AAPL) filed Monday,  the company in 2011 ...

• Paid Cook a salary of $900,017
• Contributed $14,700 to his 401(K) account
• Paid life-insurance premiums worth $1,820

That's how much Tim Cook made in 2011.

What's caught reporters' eyes is the 1 million RSUs (restricted stock units) he was granted in August as a "promotion and retention award."

In other words, to keep him at Apple.

On paper, the shares were worth more than $376 million when the grant was made. But in 2011, they were worthless. Half of them will vest in 2016, five years after they were granted. The other half will vest in 2021 -- "subject to Mr. Cook's continued employment with the Company."  As the proxy statement puts it:

"The RSU award is intended as a long-term retention incentive for Mr. Cook, and, accordingly, should be viewed as compensation over the 10-year vesting period and not solely as compensation for 2011."

The SEC, however, views RSUs differently. It requires a company to book a share grant's value in the year it is granted. Which is why careful reporters are referring to that $378 million figure as Cook's "total compensation package."

For the record, Cook -- who was Apple's chief operating officer before he succeeded Steve Jobs as CEO last August -- is a hands-on manager who makes Apple's supply chains run on time. In fiscal 2011, his company generated $108 billion in revenue. In calendar 2011, its market value grew by more than $70 billion. As of September, it had $81.57 billion in cash and marketable securities in the bank and zero debt.

If Tim Cook had been paid $378 million in 2011, you could argue that he was worth it.