Apple's newly appointed CEO will receive a salary of $3 million along with an equity target of $55 million.

      John Ternus will earn a base salary of $3 million annually as Apple’s chief executive, which is about 5% of the overall compensation the company aims for him to receive. The remainder will be in equity, as detailed in a regulatory filing on the day he assumed his position. His stock award for fiscal 2026 is prorated to $2.5 million for the weeks left in the year. For fiscal 2027, his target value for annual equity compensation is set at $55 million, though the actual amount will be contingent on his performance.

      Seventy-five percent of that equity award is linked to Apple’s total shareholder return compared to other S&P 500 companies, while the remaining 25% will vest over time, with 12.5% being allocated every six months over four years. This setup is more compelling than the headline figure; Ternus will be evaluated on whether Apple outperforms the index, rather than if its share price merely increases.

      If the market performs well and Apple lags behind, his award will decrease. This target is also more challenging than it may initially appear, as Apple is among the largest firms in the S&P 500, so meaningfully outperforming the index involves surpassing a benchmark that already reflects significant input from Apple's own performance.

      Tim Cook's appointment was structured differently and ultimately served as a case study in executive compensation. In 2011, he was granted one million restricted stock units worth $376.2 million without performance criteria, but he requested in 2013 to include such conditions. Ternus begins his tenure using the model that Cook eventually embraced. The performance-linked framework that Cook voluntarily implemented is now the standard, representing a governance change that often requires years and may involve reputational challenges.

      Cook will not be leaving Apple’s payroll. As executive chairman, he will receive a $2 million salary starting September 26 and a fiscal 2027 equity award with a target of $45 million, which is not clearly a reduced package when considering the figures alone. Bloomberg reports compensation packages at $58 million for Ternus and $47 million for Cook. These figures are targets, not guaranteed payments, and both equity portions depend on performance that has yet to occur.

      In fiscal 2025, Cook’s total compensation was $74.3 million, which included $57.5 million in stock awards. His new package is smaller, but only by approximately a third. European stakeholders may find Cook’s new responsibilities particularly relevant. As chairman, he will engage with global policymakers, effectively involving regulators.

      Apple faces challenges such as the Digital Markets Act, antitrust investigations in various regions, and a fluctuating trade landscape. Allocating $47 million for Cook's position indicates how Apple perceives its risks. Retaining a former CEO with a compensation package that remains close to that of the current CEO represents an uncommon arrangement.

      The transition took place on Tuesday, marked by Cook's final memo to employees followed by several executive shifts. The regulatory filing was submitted the same day, demonstrating efficiency albeit lacking a touch of sentimentality. Ternus already has significant exposure to Apple’s performance, holding approximately 34,000 shares valued at about $11.1 million, plus seven restricted grants covering around 305,000 additional shares, potentially worth between $50 million and $148 million depending on performance conditions.

      At this level, executive compensation serves as a governance indicator rather than a personal financial matter. Employees at Apple are not in a position to choose between $50 million and $148 million based on personal circumstances, and the board is aware of this. Hence, the pay structure holds more significance than the overall figure. The range of potential compensation illustrates the board's expectations of Ternus, hinging on Apple’s performance relative to its peers rather than solely on individual decisions he makes.

      Ternus also takes on the AI challenges that TNW has reported during this transition, along with a relinquished net cash neutral target that provides Apple more flexibility to pursue acquisitions. The pay structure implies that the board anticipates he will take advantage of this opportunity.