FORTUNE -- 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.
Did Tim Cook really make $378 million in 2011? Did his pay really drop 99% in 2012?
FORTUNE -- You'd think this would be pretty easy to sort out, especially for the financial brainiacs at Bloomberg News.
In August 2011, two months before Steve Jobs died, Apple's (AAPL) board of directors granted newly appointed CEO Tim Cook one million restricted share units (RSUs) as an incentive to stick around. Half of those MOREPhilip Elmer-DeWitt - Dec 27, 2012 9:47 AM ET
What part of "over 10 years" don't its editors understand?
The New York Times had a lot of fun with Tim Cooks' compensation package Sunday.
It led an article about excessive CEO pay with the rhetorical question: "Is any C.E.O. worth $1 million a day?" To which it responded: "At Apple, the answer ... is an emphatic yes."
Then, dubbing Cook "The 378 Million Man," it published a graphic comparing his total compensation MOREPhilip Elmer-DeWitt - Apr 8, 2012 6:28 AM ET
Apple's top exec certainly doesn't live like America's "highest paid CEO"
A Google search Tuesday morning for "Tim Cook" and "highest paid CEO" turned up 457 headlines, including a handwringer from the Seattle Times that asks "Did Apple change its core values?"
Behind all these headlines -- and especially the last -- are two mistaken assumptions:That the 1 million restricted Apple (AAPL) shares granted to Cook last August so that he wouldn't MORE Philip Elmer-DeWitt - Jan 11, 2012 7:43 AM ET
The head of hardware engineering sold 99% of his beneficially owned shares on Monday
Steve Jobs may be content to let his 5,546,451 shares of Apple (AAPL) rise and fall with the vagaries of the stock market, but some of his executive staff are a bit more attentive to their holdings.
One of the more pro-active traders is Bob Mansfield, Apple's senior vice president in charge of Mac and iPhone hardware engineering. MOREPhilip Elmer-DeWitt - Apr 27, 2011 1:59 PM ET
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