Apple’s new CEO gets a $3M salary and a $55M equity target

John Ternus will receive a base salary of $3m a year as Apple’s chief executive, roughly 5% of what the company is targeting for his total compensation. The rest is equity, according to a regulatory filing on Tuesday, the same day he took over the role.

His fiscal 2026 stock award is prorated to $2.5m for the weeks remaining in the year. For fiscal 2027, his annual equity award has a target value of $55m, although how much he actually receives will depend on his performance.

Three-quarters of that award is tied to Apple’s total shareholder return relative to other S&P 500 companies. The remaining quarter vests over time, with 12.5% paid every six months over four years.

That structure is more interesting than the headline number. Ternus is being measured on whether Apple outperforms the index, rather than simply whether its share price rises.

If the broader market has a strong year and Apple falls behind it, its award gets smaller.

It is also a tougher target than it might initially sound. Apple is one of the largest companies in the S&P 500, so outperforming the index by a meaningful margin means beating a benchmark that already includes a substantial contribution from Apple itself.

Tim Cook’s arrival was structured differently, and eventually became a lesson in executive pay. He received one million restricted stock units worth $376.2m in 2011 with no performance conditions, then asked in 2013 for conditions to be added.

Ternus is starting with the model Cook eventually adopted. The performance-linked structure Cook voluntarily introduced is now the default, which is the kind of governance change that can take a decade and an embarrassing headline.

Cook is not disappearing from Apple’s payroll. As executive chairman, he will receive a $2m salary from September 26 and a fiscal 2027 equity award targeting $45m, which is not obviously a smaller package based on the numbers alone.

Bloomberg puts the two packages at $58m for Ternus and $47m for Cook. Those figures are targets, not guaranteed payouts, and the equity portion of both depends on performance that has yet to happen.

For comparison, Cook’s total compensation for fiscal 2025 was $74.3m, including $57.5m in stock awards. His new package is smaller, but only by about a third.

European readers have a direct interest in what Cook’s new role involves. His remit as chairman includes engaging with policymakers around the world, which in practice means regulators.

Apple faces the Digital Markets Act, antitrust proceedings in several jurisdictions and a trade environment that can change from one month to the next.

Paying $47m for that role says something about where Apple sees its risks. It is also an unusual arrangement, keeping a former CEO on a package that remains close to that of the person running the company.

The handover itself happened on Tuesday, with Cook’s final memo to staff followed by a series of executive changes. The filing arrived the same day, which is efficient and slightly unromantic.

Ternus already has plenty of exposure to Apple’s performance. He holds roughly 34,000 Apple shares worth about $11.1m, along with seven restricted grants covering around 305,000 additional shares, worth somewhere between $50m and $148m depending on how the performance conditions play out.

Executive pay at this level is a governance signal rather than a household expense. Nobody at Apple is choosing between $50m and $148m based on personal need, and the board knows that. That is why the structure matters more than the headline figure.

The range captures the compensation philosophy neatly. The gap between $50m and $148m is what the board is asking Ternus to close, and it depends on how Apple performs against its peers rather than on any single decision he makes.

He also inherits the AI problem TNW has been documenting through the transition, alongside a dropped net cash neutral target that gives Apple more room to pursue acquisitions. The pay structure suggests the board expects him to use it.