Apple

Apple Execs Get Hefty Pay Cut

Apple may have said it had another strong financial year in 2016, but sales results didn’t meet target performance goals set by Apple’s Compensation Committee, which resulted in the annual cash incentive payouts to executive officers coming in below target.

In a Securities and Exchange Commission filing, Apple said the company had net sales of $215.6 billion in 2016 and operating income of $60 billion, but that’s lower than the $233.7 billion in net sales it lodged in 2015 and operating income of $71.2 billion.

“For 2017, we increased the performance-based component of our long-term equity incentives to 50 percent of the grant date fair value of the award, placing an even greater emphasis on performance-based compensation for our executive officers,” Apple said in the filing.

The move on the part of Apple comes at a time when there are concerns about sales of its iPhone 7 and iPhone 7 Plus for 2017. Nikkei Asian Review reported Apple is gearing up to cut production of its iPhone by roughly 10 percent in the new year. The production cut will happen in the first quarter and comes on the heels of Apple cutting production from Jan. to March 2016 because of a buildup of the iPhone 6s. While that move prompted Apple to rein in production of the iPhone 7, sales aren’t doing as well as expected and thus the further production cuts. The report noted the production cuts are for both the iPhone 7 and the iPhone 7 Plus. The iPhone 7 Plus is still popular, but a shortage of sensors for its camera has prompted Apple to scale back because it can’t meet demand.

The holiday season, however, turned out to be a good one for Apple, reporting its strongest growth rate in two years as it picked up market share on Android. According to the latest data from Kantar Worldpanel, the iPhone 7 was the top-selling device in the U.S. and the U.K. in the three months up to October. Analysts noted that Samsung’s recall of its competitor device, the Galaxy Note 7, was Apple’s and the iPhone’s gain. “While Android dominates in terms of the raw number of devices it powers, Apple remains the most desirable smartphone brand in the world,” said Lauren Guenveur, Kantar’s consumer insight director. Android devices make up more than 75 percent of smartphone sales in most countries, Kantar said, but the rival operating system saw its fifth consecutive year of decline in the U.S.

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