Apple’s board handed newly minted CEO John Ternus a compensation package worth up to $55 million, with the full award kicking in during the next fiscal year. Ternus received a salary bump to $3 million and restricted stock units valued at $2.5 million, prorated for the few weeks he will serve before Apple’s 2026 fiscal year ends. The board separately approved an annual equity award for fiscal 2027 with a target value of $55 million.
Performance-Based Compensation Structure
Three quarters of Ternus’ equity award will vest based on Apple’s total shareholder return relative to other S&P 500 companies. The remaining portion vests on a straightforward schedule: 12.5% every six months over four years. This structure mirrors performance metrics the board applied to predecessor Tim Cook’s compensation two years after Cook took the helm in 2011.
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Cook, who spent 15 years as CEO before shifting to executive chair, saw his salary decrease from $3 million to $2 million later this month. The board approved a $45 million target equity award for him, split evenly between RSUs vesting over four years and performance-based shares. Cook collected a $12 million bonus each of the past two fiscal years, according to Apple’s securities filings.
Contrast With Cook’s Original Package
The compensation setting looked quite different when Cook took over from the late Steve Jobs in August 2011. Apple granted Cook 1 million RSUs with a grant date value of $376.2 million, on top of a $900,000 salary the board bumped to $1.4 million a few months later. Half the award vested five years after the grant date, and the other half vested 10 years out. The board called its decision “subjective” and not based on any peer group or formula, citing input from Jobs and their assessment of Cook during his interim leadership stints during Jobs’ medical leaves.
Two years later, Cook requested the board add performance conditions to his award. The board carved out 800,000 share units from his original 1 million and divided them into 10 annual chunks of 80,000 shares apiece. If Apple finished in the top third of the S&P 500 by shareholder return, all 80,000 units for that year vested. Finishing in the middle third cost him 20,000 shares, and the bottom third cost him 40,000.
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Ternus’ Existing Holdings
A securities filing on Tuesday, required when an executive joins officer ranks, shows Ternus holds about 34,000 Apple shares in a trust, worth roughly $11.1 million at Tuesday’s stock price. He also holds seven grants of restricted stock from his years running hardware engineering, covering about 305,000 shares worth approximately $99 million or more depending on how the shares pay out. Nearly half are performance units that could pay double or nothing, which puts the payout range between $50 million and $148 million.
The shift toward performance-based equity reflects a broader trend in executive compensation at large technology companies, tying a significant portion of pay directly to shareholder outcomes rather than time-based vesting alone. Ternus’ package suggests the board wants a meaningful portion of his compensation tied to how Apple performs against its peers.
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