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Did Apple CEO Tim Cook really get a 98 percent pay cut this year?

If you judged the success of Tim Cook’s first full year in charge of Apple Inc. by the size of his financial remuneration, you might get the impression that 2012 had been a very bad year indeed. Cook’s compensation for the latest fiscal year from the company has been revealed to be $4.2 million; a sizable figure, but nowhere near the $378 million he received from the company last year. Despite the lower compensation however, the current CEO of the trendsetting tech — and increasingly lifestyle — company has actually been given a pay raise for the year. Confused?

2012 has actually been a relatively good year for Apple, with the company increasing its share of the American smartphone market from last year’s 35.8 to the current 53.3 percent, thanks to the continued success of the iPhone 4S and September launch of the iPhone 5. With this increase of marketshare came the news that the company’s iOS operating system has overtaken Android as the top smartphone OS in the United States. However, it hasn’t all been smooth sailing for the company. Apple’s decision to replace Google Maps with its own proprietary Apple Maps app in the latest iOS upgrade led to an enormous outcry from users upset at the inaccurate directions and information. Cook even publicly apologized for the move, admitting the company had fallen short on its commitment to quality service and its customers. 

That was far from the only PR-related black eye for the company this year. Apple’s legal action against Samsung for patent infringement with the Samsung Galaxy may have been successful in the United States, but it was less so in the United Kingdom. Apple had to make two separate, public apologies to Samsung, the first one having been deemed not apologetic enough by a judge. Furthermore, both iOS boss Scott Forstall and retail head John Browett left the company, leading to some concern that Apple may be losing its edge.

Following all of this, the news of Cook’s year-end take-home may seem somewhat misleading. Yes, Cook is making 98 percent less money at Apple this year than he did in 2011, but there’s a very simple reason for that: this year’s amount doesn’t include the company’s stock awards. In 2011, $376.2 million of Cook’s pay came from the various stock awards Apple issues every two years. The loss of the awards disguises the fact that Cook’s base salary actually increased this year, with Apple’s regulatory financial filing on Thursday revealing that he received $1.4 million for 2012, up from $900,000 in 2011. The $4.2 million figure is reached when that base salary figure is combined with the $2.8 million bonus he received for the year.

The news seems disarmingly bad for the company at first glance, but not so much so upon further investigation. The problem for Apple may be the eagerness with which the initial “bad” read was greeted, adding to the base narrative that the company is stumbling without its visionary creator Steve Jobs to guide it. Will 2013 be the year when people are hoping that Apple will fail?