CEOs of big companies often have their remuneration tied to the company’s performance. This gives them more incentive to work hard and push the company to meet its goals so that they can earn more money, it’s a simple formula but it has proven to be quite effective. Apple CEO Tim Cook has a similar arrangement with the Cupertino company and a recent regulatory filing shows that Tim Cook’s pay was cut last year as Apple was unable to meet its performance goals.

Apple’s recent SEC filing shows that CEO Tim Cook was paid $8.75 million in total compensation for 2016. His annual salary was actually increased by $1 million but his total compensation for the year was trimmed. Cook received a total of $10.28 million from Apple in 2015. Apple executives earned close to 89.5 percent of their targeted annual incentives.

This was to be expected since Apple missed both its revenue and profit goals for 2016. Apple’s annual sales were down by almost four percent last year, against a target of $223.6 billion it was able to bring in $215.6 billion. Apple’s operating income was down 0.5 percent from its $60 billion target.

“Overall, our 2016 performance with respect to net sales and operating income was 7.7 percent and 15.7 percent below our record-breaking 2015 levels,” Apple further detailed in the SEC filing, adding that “However, the 2016 payouts to our named executive officers were significantly less than the annual cash incentive payouts for 2015, reflecting strong pay-for-performance alignment.”

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