Apple CEO John Ternus Receives $55 Million Equity Award

John Ternus officially began his tenure as Apple's CEO on Tuesday, receiving a substantial compensation package designed to align with his new leadership role. The Apple board has awarded Ternus a base salary of $3 million and granted him restricted stock units (RSUs) valued at $2.5 million, prorated for the remainder of Apple's 2026 fiscal year. Beyond this initial grant, the board has approved an annual equity award for fiscal year 2027 with a target value of $55 million. This significant award is structured with performance-based vesting: three-quarters of the equity will vest based on Apple's total shareholder return compared to other companies within the S&P 500 index. The remaining quarter will vest incrementally over four years, with 12.5% vesting every six months. This compensation structure aims to incentivize long-term growth and shareholder value creation under Ternus's leadership.

In parallel with Ternus's new compensation, Tim Cook, who transitioned from CEO to executive chairman, has seen a reduction in his salary from $3 million to $2 million, effective later this month. Cook has also been granted a $45 million target equity award for fiscal year 2027. This award is split equally between RSUs that vest over four years and performance-based equity. This move reflects a shift in his role within the company, focusing on strategic guidance rather than day-to-day operational leadership. While Ternus's compensation package does not yet include details on an annual cash bonus, Cook received $12 million in bonuses for each of the past two fiscal years, according to Apple's securities filings. The specifics of Ternus's bonus structure are anticipated to be disclosed in future filings.

The compensation awarded to Ternus and Cook follows a precedent set during previous leadership transitions at Apple, though with notable differences. When Tim Cook succeeded Steve Jobs as CEO in 2011, his initial compensation included 1 million RSUs valued at $376.2 million on the grant date, in addition to a $900,000 salary that was later increased to $1.4 million. Half of Cook's initial RSU award vested five years after the grant date, with the other half vesting ten years later. The board's decision regarding Cook's initial award was described as subjective, not tied to specific peer group comparisons or formulas, a contrast to the performance-based metrics now being applied to Ternus's equity. Steve Jobs himself famously received a nominal salary of $1 per year during his leadership, while retaining a substantial ownership stake in the company, holding 5.5 million shares.