Hidden within Bloomberg’s rankings of the highest paid employees at Standard & Poor’s 500 companies is an unexpected — yet, not entirely unexpected — insight into Apple’s (NASDAQ:AAPL) management strategy. While it would be natural to assume that these rankings would be populated primarily by chief executive officers, that is not the case. Four of the five highest-paid employees in 2012 were Apple’s senior lieutenants, who received compensation packages designed to keep the company’s management intact in the increasingly competitive technology industry. Not even the iPhone maker’s CEO Tim Cook made the list, although he was included last year.
According to Apple’s annual proxy filing submitted to the U.S. Securities and Exchange Commission, which disclosed fiscal 2012 compensation figures for top earners, Apple’s top-paid executives were Bob Mansfield, Bruce Sewell, Jeffrey Williams and Peter Oppenheimer. Last year was the second consecutive year that Apple dominated the rankings. As Bloomberg reported, this high level of compensation has been employed by Apple’s board of directors to keep “the team that transformed the iPhone maker into the most valuable technology company under co-founder Steve Jobs, who died in 2011.”
With competition from Samsung (SSNLF.PK) and Google (NASDAQ:GOOG) in both the smartphone and tablet arenas growing ever stronger, rivals could look to poach top management to gain an edge. “It’s a retention strategy to keep the key executives who were present in the Steve Jobs era,” Opus Research analyst Greg Sterling told the publication. “They want to be sure the actual talents that they bring to the company are retained, and also from a perception standpoint to retain confidence in the leadership.”
The second-largest compensation package in the S&P 500 was awarded to Mansfield. He received $85.5 million, almost entirely in stock, last year, with his base salary amounting to just $805,400. Oppenheimer, Sewell, and William received the same base salary as Mansfield, and the pay for all four executives increased significantly after Jobs passed away. At that time, they were awarded 150,000 in restricted stock units. While Apple spokesman Steve Dowling declined to comment to Bloomberg, the company’s board noted that stock grants should be “meaningful in size in order to retain the company’s executive team during the CEO transition” in its regulatory filing…
Mansfield — Apple’s head of hardware engineering — had announced plans to retire last June, but he was persuaded to stay after members of his unit told Cook that his replacement, Dan Riccio, was unprepared for the magnitude of the job, as people familiar with the events told the publication in October. He joined the company in 1999 and now serves as the senior vice president of technologies.
Sewell, Apple’s lead lawyer, received compensation of $69 million, which placed him third in the S&P 500. He has been instrumental in Apple’s patent infringement lawsuits, including the $1.05 billion verdict the company won against Samsung last year, although a federal judge has ordered a new trial on damages for some products and reduced the award by $450.5 million.
Williams, the company’s senior vice president of operations, pulled in $68.7 million, while Chief Financial Officer Oppenheimer was award $68.6 million in total compensation in 2012.
All four earned more than Cook, who ranked 1,016 in Bloomberg’s listing, with a $4.17 million package. Apple’s four-top paid employees followed just behind Oracle’s (NASDAQ:ORCL) Chief Executive Officer Larry Ellison, who was compensated $96.2 million last year according to corporate filings.
As Bloomberg’s data clearly shows, Apple is paying a premium relative to its competitors.
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