Salaries of Multinational Company’s Executives

Executive Salaries of Multinational Company.

By

Parul (T00579419)

Navkirat(T00573232)

Contents

Statement of Purpose:        1

Scope Of Work:        1

Tasks needed to complete the report:        1

Preliminary informative outline:        1

Task Assignments and Schedule:        2

Findings:        2

Conclusion        3

Works Cited:        3

Team Description:        4

Statement of Purpose:

The basis of our report focuses on the salaries of multinational company’s executives such as Apple. Recently, Apple announced the great pay package of its new Chief Executive Officer, Tim Cook. The current CEO of Apple, receives excessive compensation at Apple Corporation. This report will provide information about the previous CEO, Steve Jobs as well as other multinational company’s CEOs providing a medium of comparison.

Scope Of Work:

All research on salaries was gathered online via payscale.com. This study also provided median pay for workers within each company including ratio of CEO to worker pay. We choose to focus on Apple and the recent CEO of the corporation Tim Cook. With this information we can compare the salary of Tim Cook to other CEO’s of multinational corporations. The other task is to find a pattern in the salary data to find answer to the questions such as: Do certain industries pay their executive more than other corporations? The end product of this report is to define what constitutes as businesses overcompensating.

Tasks needed to complete the report:

The main tasks needed to complete this research is to gather facts and determine what compensation is considered extreme. Although, initial research primarily involves Apple, there will be information gathered about other corporation’s compensation packages to determine the extent of reimbursement. The most problematic part of this report will be finding a solution that would be beneficial to both the stockholders and the public.

Preliminary informative outline:

Apple is an American multinational technology company, headquartered in California, United States of America. The corporation designs, develops and sells different types of gadgets. The CEO of Apple for 14 years, Steve Jobs was replaced by Tim Cook, current CEO of Apple in 2011. Tim Cook had a salary of US$58.5million in 2015, Apple provided Cook huge amount of stock options and investments and was paid US$ 69.6 million in vested stock options. The total compensation package is nearly US$ 4.2 million.

Task Assignments and Schedule:

Findings:

Tim Cook is the second highest paid CEO behind Mark Zuckerberg (CEO of Facebook). The comparison of Apple to other economic powerhouses like Microsoft, IBM, Walmart and Amazon the perhaps unethical pay that some believe Cook is receiving. According to the Business Insider, Microsoft expects CEO Nadella’s annual pay to be US$18 million and US$13 million of it as stock grant. Oracle pays their co-CEOs $37.7 million apiece for their first year. Also, the CEO of Yahoo was paid $36.6 million her first year. Apple exemplifies the notion that courteously paying your CEO in salary and stock grants that keep them invested in the company. Cook is paid above and beyond the necessary compensation and has yet to have a major impact on the company’s success and bring the company back in the competition.

The ethical nature of excessive CEO salaries is a multi-tiered issue. CEO-to-worker pay ratio seems to be the most discussed topic amongst advocates of overcompensation. The previous CEO of Apple, Steve Jobs, has been a great influence on the company and his contribution is recognized around the world. It is reported that he took US$1 salary during his time as CEO (Associated Press, 2010). The vision of an industry that was always about reaching for something higher has faded. Tim Cook has failed to demonstrate his skills to create another source of revenue for Apple like iPod, iPad and iPhone. However, the launch of different series of iWatch has helped Apple to stay in the race of innovation. The main issue under is leadership is how Apple is valued by investors and the public. Moreover, Apple is struggling for dominance with major rivals such as Google, Samsung, Amazon and Motorola.

Apple stands as one of the largest companies in the world. Apple’s has had a 274% increase in stock performance. According to Nasdaq.com, Apple Corporation is expected to grow earnings at an average annual rate of 12.81%. In 2016, the forecasted earnings increase was 18.18%. In 2018, experts expect a growth on this year forecasted earnings of 11.58%. 

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In the above graph, Apple’s had had 274.23% increase in stock performance. Evidently, the average stock price of apple is far higher than the average stock price of the different indexes. With a market cap of 673.75 billion dollars, Apple Inc. has the largest amount of capital among any of its competitors by a wide margin. It goes without saying that Apple has a lot of funds to work with. With that in mind, it goes to show that they have enough money to pay a large amount of money to their CEO with the confidence that they will have a good amount in as profit.