Katherine Adams’ first full year as Apple Inc.’s general counsel was 2018, and, all told, her compensation added up to $5 million.
Her Apple earnings from last year are detailed in the Cupertino, California-based company’s 2019 proxy statement, filed Tuesday with the U.S. Securities and Exchange Commission. Adams’ base salary for 2018 was $1 million. But because of a 53-week fiscal year in 2017, her 2018 salary listed on the proxy statement was $884,615.
She also earned $4 million in nonequity incentive compensation, the maximum total payout for her annual cash incentive. With around $5 million in total cash compensation, Adams earned more than most of the GCs listed in Corporate Counsel’s 2018 GC Compensation Survey, breaking into the top 10.
According to the filing, Adams’ annual cash incentive was boosted because Apple’s executives exceeded the maximum performance goals for both net sales and operating income.
Apple reported net sales of $265.6 billion and an operating income of $70.9 billion in 2018, both numbers representing a year-over-year increase of 16 percent, according to the filing. Last week, Apple CEO Tim Cook lowered the company’s quarterly revenue forecast due to slow iPhone sales in China.
“We believe the compensation paid to our named executive officers for 2018 appropriately reflects and rewards their contribution to our performance,” Apple said in the filing, which was signed by Adams.
Adams also received $21,509,765 in stock awards and $306,280 in other compensation, including Apple’s contributions to her 401(k) plan and relocation expenses. She joined the company in November 2017 from Morris Plains, New Jersey-based Honeywell, where she was senior vice president and general counsel.
“[Restricted stock units] awards with time-based vesting align the interests of our named executive officers with the interests of our shareholders by promoting the stability and retention of a high-performing executive team over the longer term,” the filing said.
Five other Apple executive officers, including Cook, had their compensations outlined in the filing. All listed executives had a base salary of $1 million, except Cook, whose base was $3 million. The executives’ base salaries were around the same in 2017.
According to the filing, the executives’ compensation packages are determined by a board of independent directors.
The directors use risk reports provided from Adams and other members of Apple’s risk oversight committee when creating compensation packages. They also consider Cook’s evaluations of other Apple executives, a compensation consultant’s advice and the compensation of peers at other tech companies, including Alphabet Inc., Amazon.com Inc., Facebook Inc. and Intel Corp.