NEWS: 08.26.20 – Apple CEO Tim Cook has finally joined the ranks of the billionaire’s club.
Earlier this month, Bloomberg reported that the chief executive officer of Apple, Inc. became — after nearly a decade at the helm of the company — a billionaire with an estimated net worth that has eclipsed $1 billion according to calculations from the “Bloomberg Billionaires” index. The news of Cook reaching this newfound status came alongside a report that the Cupertino, California-based company’s market value was inching closer to the $2 trillion mark, a milestone which it has since reached.
Back in January of this year, CNBC reported — based on a filing with the U.S. Securities and Exchange Commission (SEC) — that the Apple CEO’s salary for 2019 was $3 million, taking home over $125 million in compensation along with a bonus of $7.67 million. Cook also received upwards of $800,000 in other compensation, including a $16,800 contribution to his 401(k) plan.
For a comparison, an Apple employee’s median salary that same year was $57,596.
CNBC reported that the majority of the Apple CEO’s salary came from the vesting of $113.5 million worth of the company’s shares. At the time of the report, it was noted that Cook’s compensation since becoming chief executive officer in August 2011 had totaled $963.5 million.
The now 59-year old Cook was reported as having said back in 2015 that he planned to give away most of his fortune, with millions of dollars worth of the company’s shares already having been gifted by the Apple CEO.
Unlike other CEOs who are the founders of the companies that they run, such as, for instance, Jeff Bezos of Amazon or Mark Zuckerberg of Facebook, the Apple CEO is not the company’s founder. When the late Apple co-founder, Steve Jobs, stepped down as chief executive officer in August 2011 due to his waning health — and died two months later after a years-long battle with pancreatic cancer — Cook had already filled in as Interim CEO on several occasions and found himself thrust to the top.
According to Cook’s biography on the company’s website, prior to ascending to the role of chief executive officer, Cook formerly held the position of chief operating officer (COO) and was responsible for Apple’s worldwide sales and operations, including end-to-end management of its supply chain, service and support, and sales activity in each market of every country doing business with the company. He also was in charge of the Mac division, playing a key role in the continued development of strategic reseller and supplier relationships.
The chief executive officer holds both a Master of Business Administration and a Bachelor of Science in Industrial Design degree from Duke University — where he was a Fuqua Scholar in the university’s Fuqua School of Business — and Auburn University, respectively.
The Apple CEO has long been criticized for the lack of new innovations and is often judged against the accomplishments of his predecessor, who, in stark contrast, unveiled a handful of groundbreaking products during his tenure, from the iMac and iPod to the iPhone and iPad. But despite this fact, and, to Cook’s credit, the company has stayed afloat under his watch and enjoyed explosive financial growth never before seen in the company’s history.
“Out of all these stocks, Apple has become the greatest cash generation machine in history,” said Hussein Kanji, a partner at venture capital firm Hoxton Ventures, speaking to Bloomberg.
When Cook took over as Apple CEO, according to Bloomberg, analysts — including investors — were concerned that Apple wouldn’t be able to innovate as much as it did in the past without Jobs at the helm. Kanji was among the individuals who, at the time, had originally expressed skepticism over Apple’s long term outlook after Jobs’s departure and untimely death.
Under Cook’s leadership, today, Apple has grown into a giant technology company that has expanded beyond the Mac — its core product — as well as the iPhone and the iPad to include wearables such as the Apple Watch and AirPods and services like the App Store, Apple Music, and Apple TV+, the latter of the two segments bringing in billions of dollars in revenue each year.
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On the heels of Cook achieving a personal milestone, last Wednesday Apple achieved its own, becoming the first U.S. company to reach a $2 trillion market valuation. Per a report from Business Insider, Shares of the Cupertino company rose 1.2% to an all-time high of $467.84 to hit the mark.
Last Wednesday’s milestone was only preceded by the record previously set by Apple in August 2018 when it became the first U.S. company to reach a market valuation of $1 trillion as the Wall Street Journal reported that Summer.
In its report, the Wall Street Journal attributed Apple’s rise to the top — as the world’s most valuable company of 2018 — not only to the sustained success of the iPhone but to its rapidly growing services business as well. The move, which was credited to Cook, helped to transform Apple into a “cash generation machine” (to borrow the words of Hoxton Ventures’ Kanji).
In addition, the move helped to stave off continued concerns about the absence of a new innovative product of groundbreaking proportions: the type not seen since Jobs was Apple CEO.
According to the Wall Street Journal, Apple first took the title of the world’s most valuable company back in August 2011 — just as Jobs stepped down as its chief executive officer and died shortly thereafter — when it edged out Exxon Mobil, displacing energy companies and signifying the tech sector’s new market dominance. At the time, the Cupertino company was valued at approximately $343 billion.
No longer a minor niche computer company that originated as a small startup in Jobs’s garage in Silicon Valley but a major global electronics powerhouse, Apple kept rising, cementing its market valuation lead two years later in August 2013 and consistently held it through 2018 (except for a few days in 2016 when Google’s parent company, Alphabet, was briefly and temporarily bigger).
In the long term, however, the Wall Street Journal reported that investors at the time worried about the company’s ability to launch another innovative product like the iPhone: an issue that still remains to this very day. And while its new smartwatch — the Apple Watch, which debuted in 2015 — made Apple the world’s largest seller of watches through sales, the wearable, by comparison, hasn’t delivered the same type of boost that Apple’s other hit products have done in the past.
“We’ve heard a number of times since [Steve] Jobs died that the company was going to slip and fall, but they’ve continued to execute,” Greg Hersch, founder of Florence Capital Advisors, told the Wall Street Journal.
Even during the current global pandemic, Apple has had a strong year with the company reporting stellar quarterly earnings that, according to Business Insider, have beaten Wall Street’s expectations. As a result, investors have been flocking to the iPhone maker — as well as other giant technology companies like Google and Microsoft — seeing them as being uniquely positioned to withstand the economic slump due to the COVID-19 crisis.
A Note from the Author: the image featured herein was procured from and courtesy of the Bloomberg website via the same article cited within as source material for this story.