Apple 2.0

Covering the business that Steve Jobs built

No, Apple's senior VPs are not the S&P 500's best-paid execs

April 16, 2013: 10:33 AM ET

Don't Bloomberg's brainiacs know the difference between an RSU and a pay check?

Screen Shot 2013-04-16 at 10.09.39 AMFORTUNE -- Remember the stories in the tech press last year that named Apple's (AAPL) Tim Cook the highest-paid CEO of 2011? Remember the headlines a year later announcing that Cook had taken a 99% pay cut?

The problem with both narratives is that they treated the 1 million RSUs (restrictive stock units) Cook was granted in August 2011, after Steve Jobs stepped down, as if they were the same as cash in hand. They are not. Half of them will vest in 2016, the other half in 2021 -- if Cook lasts that long. Until then, those 1 million shares are worthless.

Well, the tech press has done it again.

On Monday, Bloomberg posted a story (repeated by more than a dozen newspaper and blogs) claiming that four Apple senior VPs are among the five highest-paid executives in the S&P 500. The executives named were Bob Mansfield, Bruce Sewell, Jeffrey Williams and Peter Oppenheimer. "Their pay jumped," according to Bloomberg, "after receiving 150,000 in restricted stock units shortly after Jobs passed away."

No, their "pay" didn't jump. Their total compensation packages may have, but only if they stay with Apple long enough to collect them. That's the point of "retention" incentives: they encourage executives to stick around.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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