7 ms·

> All told, Cook made $12,825,066 at Apple in 2017 -- including a $16,200 contribution to his 401(k) retirement account from the company. $16k 401(k)really? Is

by Bankq 8y ago

> All told, Cook made $12,825,066 at Apple in 2017 -- including a $16,200 contribution to his 401(k) retirement account from the company. $16k 401(k)really? Is that from a legal requirement?

emaercklein 8y ago
compared to other CEO compensations, that's actually pretty low compensation comparatively (from this analysis of Fortune 100 CEO compensations: https://craft.co/reports/fortune-100-ceo-salaries https://craft.co/reports/fortune-100-ceo-salaries)
- hn_throwaway_99 8y ago
  These CEO compensation comparisons are almost always bullshit because of the way CEOs are usually periodically compensated with a large stock award that vests some number of years later. Using Cook as an example, given he was previously awarded 7 million shares of AAPL, if you averaged that out over time he'd be right at or near the top. From another article: > Cook did not receive a stock award in 2017, after receiving a large award of 7 million shares that vests on an elongated schedule through 2021 upon being named the successor to Apple co-founder Steve Jobs in 2011. That award was valued at $378 million at the time, making him the highest paid CEO of that year.
ianferrel 8y ago
I'm sure he has an accountant handle that stuff. It's (tax) free money, why not take it?
- drakenot 8y ago
  Why wouldn't he contribute the 2017 max of $18,000?
  - refurb 8y ago
    It’s not his contribution. It’s the company match.
  - bgentry 8y ago
    The $16k figure sounds like the amount that Apple contributed on Cook's behalf via matching funds.
    - Retric 8y ago
      In 2017 companies may only use up to $270,000 when calculating company matches to a 401k * whatever their max limit is for normal staff. 275 * 6% = 16.2k which sounds about right. https://www.irs.gov/retirement-plans/401k-plans-deferrals-and-matching-when-compensation-exceeds-the-annual-limit https://www.irs.gov/retirement-plans/401k-plans-deferrals-an...
      - tedmiston 8y ago
        This seems like the most logical answer in the thread
  - h4b4n3r0 8y ago
    I really doubt he even knows about this. His accountant goofed, probably.
- rossbmiller 8y ago
  The other way around, if his financial professionals weren't taking advantage of this total "gimme" of the planning world, he'd probably be concerned.
  - deleted 8y ago
    [deleted]
smileysteve 8y ago
Gotta postpone those taxes and get that corporate match :-P
ryanmercer 8y ago
> Is that from a legal requirement? No and it's just weird. If he contributed the maximum he could have contributed 18,000 plus 6,000 catch up taking him to 24,000 with a defined contribution maximum limit from all sources of 60,000. That means they could have contributed another 20k.
- dboreham 8y ago
  There are rules about how much the company contributions can be (aimed at preventing executives paying themselves huge tax-free pensions).
  - wil421 8y ago
    For employee contributions the max is $18,500k and for employer contributions it’s $32,500. You can also add $6,000 more if you are over a certain age.
    - deleted 8y ago
      [deleted]
    - dboreham 8y ago
      I'm talking about the rules that relate the contributions by the company to highly compensated individuals vs the bulk of the workforce. See https://www.goodfinancialcents.com/401k-limits-for-highly-compensated-employees/ https://www.goodfinancialcents.com/401k-limits-for-highly-co...
programbreeding 8y ago
The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit. And/or Apple matches 1:1. The personal maximum contribution is $18,000/yr, and he intentionally stayed under that limit.
- ryanmercer 8y ago
  >The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit. 60k, he's over 50.
- refurb 8y ago
  The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit. Not sure I understand. How could he hit the limit? Tim can contribute $24,500 ($18K + $6K since he's over 50). If Apple matched $16,000, how could he hit the max of $60K?
  - SteveNuts 8y ago
    I believe companies can add more to the 401k than what the person contributes.
    - refurb 8y ago
      Yeah, but the article states Apple contributed $16k. Maybe it’s the highly compensated employee clawback? I know if you make over a certain amount your contribution and matching limits can come down.
gehwartzen 8y ago
I always find these 401k contributions to extremely high paid executives as kind of comical. That’s an effective match of 0.12% or, to really put it in perspective, the equivalent of a $72 yearly match for an average American making 60k.
- refurb 8y ago
  It’s free money, why not take it?
  - casefields 8y ago
    Some people don't waste their time when it's inconsequential to their lives. https://www.nbc.com/late-night-with-seth-meyers/video/graydon-carter-got-trump-to-cash-a-check-for-13-cents/3415256 https://www.nbc.com/late-night-with-seth-meyers/video/graydo... Free money is free money.
    - 1123581321 8y ago
      I guess Cook has someone take care of his payroll elections, and will have someone manage the withdrawals or the account in his estate. That person likely costs less per hour than the money saved by doing the paperwork.
    - mikestew 8y ago
      Waste their time? You have to fill out the 401K form anyway, and it's not more effort to click the "Gimme free money!" button than it is to click "Do Not Want Free Money!". Even at benefits enrollment time, it could take 60 seconds to get to the "Max it out, bitches!" button rather than the "Keep everything the same". And while I'm on the topic, why is it that no company I've worked at has a "whatever the legal limit is for a person my age" button instead of making me do the math each time?
moftz 8y ago
Supposedly Apple will match up to 100% after several years of employment. Tim Cook is above the catch-up age so he can throw in $24k/year and I would imagine he is doing that, he can definitely afford it. So maybe Apple really doesn't do 100% or Cook isn't throwing as much into his 401k as he could be. He makes more in one year than most people have in their 401k when they retire.
swlkr 8y ago
I'm surprised it's that little considering how well the company has performed since he's been CEO.
- briandear 8y ago
  His stock is worth a slight bit more than that.
- lisper 8y ago
  The 12M refers to salary, which is a rounding error compared to the value of his stock and options.
Retric 8y ago
I have the same answer down the threat but basically: They can only calculate company mach using the same formula as everyone else and a salary limit. For 2017: 270,000 * 6% = 16.2k which is the number given. https://www.irs.gov/retirement-plans/401k-plans-deferrals-and-matching-when-compensation-exceeds-the-annual-limit https://www.irs.gov/retirement-plans/401k-plans-deferrals-an... PS: My guess is the 6% is because they do something like 100% matching up to 6% salary.

by Bankq 8y ago

> All told, Cook made $12,825,066 at Apple in 2017 -- including a $16,200 contribution to his 401(k) retirement account from the company. $16k 401(k)really? Is that from a legal requirement?

emaercklein 8y ago

compared to other CEO compensations, that's actually pretty low compensation comparatively (from this analysis of Fortune 100 CEO compensations: https://craft.co/reports/fortune-100-ceo-salaries https://craft.co/reports/fortune-100-ceo-salaries)

hn_throwaway_99 8y ago
These CEO compensation comparisons are almost always bullshit because of the way CEOs are usually periodically compensated with a large stock award that vests some number of years later. Using Cook as an example, given he was previously awarded 7 million shares of AAPL, if you averaged that out over time he'd be right at or near the top. From another article: > Cook did not receive a stock award in 2017, after receiving a large award of 7 million shares that vests on an elongated schedule through 2021 upon being named the successor to Apple co-founder Steve Jobs in 2011. That award was valued at $378 million at the time, making him the highest paid CEO of that year.

ianferrel 8y ago

I'm sure he has an accountant handle that stuff. It's (tax) free money, why not take it?

drakenot 8y ago
Why wouldn't he contribute the 2017 max of $18,000?
- refurb 8y ago
  It’s not his contribution. It’s the company match.
- bgentry 8y ago
  The $16k figure sounds like the amount that Apple contributed on Cook's behalf via matching funds.
  - Retric 8y ago
    In 2017 companies may only use up to $270,000 when calculating company matches to a 401k * whatever their max limit is for normal staff. 275 * 6% = 16.2k which sounds about right. https://www.irs.gov/retirement-plans/401k-plans-deferrals-and-matching-when-compensation-exceeds-the-annual-limit https://www.irs.gov/retirement-plans/401k-plans-deferrals-an...
    - tedmiston 8y ago
      This seems like the most logical answer in the thread
- h4b4n3r0 8y ago
  I really doubt he even knows about this. His accountant goofed, probably.
rossbmiller 8y ago
The other way around, if his financial professionals weren't taking advantage of this total "gimme" of the planning world, he'd probably be concerned.
- deleted 8y ago
  [deleted]

smileysteve 8y ago

Gotta postpone those taxes and get that corporate match :-P

ryanmercer 8y ago

> Is that from a legal requirement? No and it's just weird. If he contributed the maximum he could have contributed 18,000 plus 6,000 catch up taking him to 24,000 with a defined contribution maximum limit from all sources of 60,000. That means they could have contributed another 20k.

dboreham 8y ago
There are rules about how much the company contributions can be (aimed at preventing executives paying themselves huge tax-free pensions).
- wil421 8y ago
  For employee contributions the max is $18,500k and for employer contributions it’s $32,500. You can also add $6,000 more if you are over a certain age.
  - deleted 8y ago
    [deleted]
  - dboreham 8y ago
    I'm talking about the rules that relate the contributions by the company to highly compensated individuals vs the bulk of the workforce. See https://www.goodfinancialcents.com/401k-limits-for-highly-compensated-employees/ https://www.goodfinancialcents.com/401k-limits-for-highly-co...

programbreeding 8y ago

The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit. And/or Apple matches 1:1. The personal maximum contribution is $18,000/yr, and he intentionally stayed under that limit.

ryanmercer 8y ago
>The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit. 60k, he's over 50.
refurb 8y ago
The maximum total contribution to a 401k (employee + employer) is $55,000/yr. He likely hit that limit. Not sure I understand. How could he hit the limit? Tim can contribute $24,500 ($18K + $6K since he's over 50). If Apple matched $16,000, how could he hit the max of $60K?
- SteveNuts 8y ago
  I believe companies can add more to the 401k than what the person contributes.
  - refurb 8y ago
    Yeah, but the article states Apple contributed $16k. Maybe it’s the highly compensated employee clawback? I know if you make over a certain amount your contribution and matching limits can come down.

gehwartzen 8y ago

I always find these 401k contributions to extremely high paid executives as kind of comical. That’s an effective match of 0.12% or, to really put it in perspective, the equivalent of a $72 yearly match for an average American making 60k.

refurb 8y ago
It’s free money, why not take it?
- casefields 8y ago
  Some people don't waste their time when it's inconsequential to their lives. https://www.nbc.com/late-night-with-seth-meyers/video/graydon-carter-got-trump-to-cash-a-check-for-13-cents/3415256 https://www.nbc.com/late-night-with-seth-meyers/video/graydo... Free money is free money.
  - 1123581321 8y ago
    I guess Cook has someone take care of his payroll elections, and will have someone manage the withdrawals or the account in his estate. That person likely costs less per hour than the money saved by doing the paperwork.
  - mikestew 8y ago
    Waste their time? You have to fill out the 401K form anyway, and it's not more effort to click the "Gimme free money!" button than it is to click "Do Not Want Free Money!". Even at benefits enrollment time, it could take 60 seconds to get to the "Max it out, bitches!" button rather than the "Keep everything the same". And while I'm on the topic, why is it that no company I've worked at has a "whatever the legal limit is for a person my age" button instead of making me do the math each time?

moftz 8y ago

Supposedly Apple will match up to 100% after several years of employment. Tim Cook is above the catch-up age so he can throw in $24k/year and I would imagine he is doing that, he can definitely afford it. So maybe Apple really doesn't do 100% or Cook isn't throwing as much into his 401k as he could be. He makes more in one year than most people have in their 401k when they retire.

swlkr 8y ago

I'm surprised it's that little considering how well the company has performed since he's been CEO.

briandear 8y ago
His stock is worth a slight bit more than that.
lisper 8y ago
The 12M refers to salary, which is a rounding error compared to the value of his stock and options.

Retric 8y ago

I have the same answer down the threat but basically: They can only calculate company mach using the same formula as everyone else and a salary limit. For 2017: 270,000 * 6% = 16.2k which is the number given. https://www.irs.gov/retirement-plans/401k-plans-deferrals-and-matching-when-compensation-exceeds-the-annual-limit https://www.irs.gov/retirement-plans/401k-plans-deferrals-an... PS: My guess is the 6% is because they do something like 100% matching up to 6% salary.