Tim Cook Completes First Year as Apple CEO
On August 24 2011, Apple's late CEO Steve Jobs resigned. One year later and Apple is going from strength to strength, with its share price closing last night at $663.22, compared to $372.12 a year ago, and the news last week that Apple had beat Microsoft to become the most valuable company in history with a market cap of $623.5 billion on 20 August.
In the year since Jobs' resignation Apple has launched the MacBook Pro with Retina Display, new MacBook Airs, the iPhone 4S, the New iPad, and OS X Mountain Lion. Within the next few weeks the company is expected to launch a new iPhone (frequently referred to as the iPhone 5, despite it being the sixth iPhone), and iOS 6. There are also rumors that Apple may launch an iPad Mini, and eventually a television. There is certainly a lot of confidence that Apple will continue its ascent. (See also "Steve Jobs at Apple: A Timeline.")
Back when Jobs resigned, there was some concern that without Jobs at the helm, Apple would some how lose its way. Gartner analyst Michael Gartenberg disagreed, he said: "This definitely marks the end of an era, but there's much more to Apple than Steve Jobs."
Jobs had "strongly recommended" that the board of directors appoint Tim Cook as his successor. Cook had effectively done the jobs before, covering Jobs' various medical leaves of absence while he was fighting the cancer that eventually killed him. Apple granted Tim Cook a "promotion and retention award" valued at $376 million when he took over as CEO (although much of that is tied up in shared that Cook can't vest until he has been at Apple for another ten years).
"I believe Apple's brightest and most innovative days are ahead of it. I look forward to watching and contributing to its success in a new role," wrote Jobs in his resignation letter, adding: "I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you."
It was generally thought that as Apple CEO Cook faced a daunting task succeeding Jobs. A year later and it seems to be a good time to examine the successes, and failures, of his Jobs' successor.
Announcing Cook's appointment, Apple board member Art Levinson said: "The Board has complete confidence that Tim is the right person to be our next CEO. Tim's 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgment in everything he does."
Now age 51, Cook joined Apple shortly after Jobs' return in 1997 having previously worked for IBM and Compaq. He became chief operating officer in 2007. Cook first came into prominence when he covered Jobs' first medical leave of absence in 2004.
A Popular and Generous CEO
It would seem that Cook is doing a good job in the eyes of Apple employees. In a poll of investors, the majority vote, a strong 78 percent, believe the new Apple chief is performing excellently.
As for staff, Cook is more popular than Jobs at Apple. Cook got a 97 percent approval rating from Apple's workforce, according to a survey conducted by job search site Glassdoor.com. In comparison, Paul Jacobs, of Qualcomm (95 percent); Larry Page, of Google (94 percent); Paul Otellini, of Intel (90 percent); Pierre Nanteme, of Accenture (91 percent); and Paul Mantz, of VMware (90 percent). Steve Jobs had 97 percent at the time he resigned, but 95 percent before that.
Apple employees have good reason to be happy: Apple Store staff have received pay rises and promises of Mac and iPad discounts. Cook even gave the company's entire staff some extra time off over Thanksgiving. "In recognition of the hard work you've put in this year, we're going to take some extra time off for Thanksgiving. We will shut down with pay on November 21, 22, and 23 so our teams can spend the entire week with their families and friends," he told staff.
And it's not only Apple staff who are benefiting from Cook's generosity, the CEO has told Apple's employees that they can get charitable donations matched up to the value of $10,000 per year. "Starting September 15, when you give money to a non-profit 501(c)(3) organization, Apple will match your gift dollar-for-dollar, up to $10,000 annually," he said. Apple's Jobs was 'happy' about Tim Cook's passion for charity, an area Jobs wasn't particularly known for.
Cook's generosity is also exemplified by his decision to award Apple employees who hold restricted stock (RSU) dividend equivalent payments back in May. Most interesting was Cook's decision to decline the dividend payout that would have let him take $75 million in dividend payments. Read: Tim Cook declines $75 million in Apple staff dividend payout
The Investor's CEO
Just looking at the amazing rise of Apple's share price over the past year it's easy to see that investors are still confident in Apple post-Jobs. It seems that Cook has greater respect for his investors than Jobs did, ensuring that he attends Financial results conference calls and shareholder meetings, something that Jobs didn't always do.
One indication that he values investors is Cook's decision to pay a dividend to shareholders. "So we are going to initiate a dividend and share repurchase program. We have thought very deeply and very carefully about our cash balance," said Cook in a conference call where he discussed dividend payments and share repurchase initiatives. "We plan to initiate a quarterly dividend of $2.65 per share beginning in the September quarter. A quarterly dividend will provide current income to our shareholders, and we also believe it will broaden Apple's investor base by attracting new investors who don't currently own Apple stock."
An influential CEO
Tim Cook made it into 2012's Time 100 list, featuring 100 names of the people it believes are the most influential in the world.
That's all well and good, but being popular with Apple's staff and investors doesn't necessarily mean that staff, investors, and consumers will have the same degree of confidence in Cook that they had in Jobs. Cook made it clear from the beginning of his tenure as CEO that the company would continue on as before even without Jobs in the CEO's chair. "I want you to be confident that Apple is not going to change," Cook said in a letter to Apple employees.
Cook continued: "I cherish and celebrate Apple's unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that."
Not a 'Thermonuclear' CEO
According to his biographer Walter Isaacson, Steve Jobs was prepared to go to "thermonuclear war" with Google over Android. Apple CEO Cook, on the other hand, won't be going 'thermonuclear'. Cook told analysts in April's financial results conference call that as long as everyone stops copying Apple he'd be happy to: "Get a fair settlement on the stuff that's occurred."
Cook added: "We just want people to invent their own stuff. If we could get into some kind of arrangement where we could be assured that's the case and a fair settlement of the stuff that's occurred, I would highly prefer to settle versus battle".
That doesn't mean he will give in. The judge in the Apple v Samsung case encouraged Cook to meet with Samsung's CEO back in May to negotiate a settlement in the patent dispute, Cook proved that he was no pushover and no settlement was reached at that time.
A Social CEO
Cook certainly hasn't hidden away since becoming CEO. Earlier this year Apple's Tim Cook headed to the US House of Representatives to met with the speaker at the U.S. Capitol building in Washington.
Cook also was success in his dealings with Oracle. That company agreed to provide Mac users with Java updates. Read: Cook's coup in getting Oracle to maintain Java for Mac.
Cook also met with Ferrari boss Luca di Montezemolo, who was impressed by Apple CEO Tim Cook when he met him: "I was impressed by his availability and openness," Montezemolo said.
Cook, like Jobs, also drops the odd e-mail to customers. A backlash at the supposed Mac Pro update, led Cook to send an e-mail to Facebook group page "We Want a New Mac Pro" confirming that a truly new Mac Pro is coming. He wrote that Apple is "working on something really great" for 2013, adding: "Our Pro customers like you are really important to us. Although we didn't have a chance to talk about a new Mac Pro at today's event, don't worry as we're working on something really great for later next year."
Cook also responded to a customer's e-mail questioning new SVP of retail John Browett's appointment. Browett was Cook's first major hire since taking over the company. Brit, John Browett was the CEO of Dixons and was bought in to lead Apple's own retail operation.
An Open CEO
Cook also attended a couple of conferences this year. Perhaps the most insight into Cook came with his appearance at the D10 conference, where he revealed how much he is enjoying his new role: "It's an absolute, incredible time to be with Apple. I'm loving every minute of it," he said during his chat with Kara Swisher and Walt Mossberg. Read: Apple CEO Cook: 'Enjoying every minute' at Apple.
Cook also revealed that he felt an 'intense sadness' after Jobs death in October 2011, saying: "It was absolutely the saddest days of my life when he passed away".
Cook fueled the rumor mills with a variety of snippets about areas that Apple is rumored to be working on, for example, he spoke about Television, gaming, Siri, Ping, revealed that he believed gaming on the TV is "interesting" and said Apple is "pulling strings" on Apple TV to "see where it goes."
Cook also spoke at the Goldman Sachs Technology and Internet Conference on a variety of topics, ranging from working conditions at Apple's Chinese suppliers to Apple's culture and ethos.
A CEO for China
China was an important part of Cook's first year. Cook was furious at reports of worker abuses in China and went a long way to investigate the problems, even visiting the Chinese factories.
Cook said he was "outraged" by a series of New York Times reports alleging worker mistreatment and neglect at Chinese factories that assemble the company's iPhones, iPads, and other devices.
Speaking at the Goldman Sachs Technology conference, Cook said: "The first thing that I would want everyone to know is that Apple takes working conditions very, very seriously, and we have for a very long time. Whether workers are in Europe or in Asia or in the United States, we care about every worker." Cook also emphasized that "I care about Chinese and U.S. workers" during the D10 conference.
Cook also sent an e-mail to Apple employees regarding the matter, saying: "We care about every worker in our worldwide supply chain. Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don't care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It's not who we are."
An Opinionated CEO
Cook might not be as opinionated as Jobs was famous for being, but he wasn't shy to make a point. At various events Cook made clear his opinions about the direction he sees technology going. For example, speaking at a March 7 press event, Cook outlined his vision of a post-PC world, saying: "When we're talking about the post-PC world, we're talking about a world where the PC is no longer the center of your digital world, but rather just the device. We're talking about a world where your new device, the devices you use the most, need to be more portable, more personal, and dramatically easier to use than any PC has ever been." (Read more here: "Tim Cook outlines Apple's vision of a post-PC world.")
Cook also stated that the iPad will replace the PC "for some people" and that iPads and tablets will outsell PCs. This was following his claims that nobody wants a refrigerator-toaster: his belief is that the tablet and PC should never converge. "I think anything can be forced to converge, but the problem is that products are about tradeoffs, and you begin to make tradeoffs to the point where what you have left at the end of the day doesn't please anyone. You can converge a toaster and a refrigerator but y'know, those things are probably not going to be pleasing to the user," he said in the conference call with analysts in April. Read: Apple execs: On toaster-fridges, financial guidance, and lawsuits.
Not surprisingly, Apple won't combine MacBook and iPad, according to Cook. Combining a MacBook and an iPad would never work, and that's why Microsoft's plans to push Windows 8 out to both tablets and laptops will be a disaster, he said.
A Well-Paid CEO?
The New York Times claim that Cook earned $1 million a day, roughly $42,000 an hour or $700 a minute turned out to be far from true. The $378 million figure is based on a one-time stock award of $376.2 million, which is awarded to Cook only if he stays at the company for ten years. Read Apple CEO Tim Cook doesn't earn $1 million a day.
Apple granted Tim Cook a "promotion and retention award" valued at $376 million when he took over as CEO. Half of the stock units are scheduled to vest five years after the date Cook assumed the CEO role, and half after ten years, as long as Cook stays employed at Apple.
Still a New CEO
Steve Jobs' legacy is to thank for Apple's strong performance, according to one shareholder. Saudi billionaire and Apple shareholder Prince Alwaleed bin Talal said the time to judge how well Apple's new management team is performing will be in two years' time.
Forrester Research CEO George Colony called Cook a "proven and competent executive," but one who lacks the magnetism to a lead a unique company like Apple.
Cook may not have the creative genius and magnetism that Jobs had, but he has other skills that will help him steer Apple to success. "The only thing can hold Apple back is Apple itself and not being able to keep up with demand. Enter Mr. Tim Cook, guru of supply chain economics. Steve Jobs almost certainly foresaw the supply issues ahead in endorsing Cook as his successor," according to one report.
It should also be noted that as chief operating officer and now as CEO, Cook has managed the flow from design to manufacturing to distribution to sales with brilliance. Also, Apple's $98 billion in the bank proves that he has optimized this global process to the nth degree.
"You know, I love Apple, and it's just a reminder every day of how much of a privilege it is to work with a team of people that are so incredible and how lucky I am. I think the team is doing a fantastic job. We feel very good about where we are," Cook said.
Apple Has No Fears for the Future
Initial anxiety over Apple's future at the time of its co-founder's death appears to have faded into oblivion, washed out by product successes like the iPhone 4S and third-generation iPad, and investor sops like dividends.
"In a very short time, concerns about Apple after Steve Jobs seem to have disappeared," Nigam Arora, publisher of an investment newsletter, writes in Forbes. "There is hardly ever a mention of this subject in the media."
While Cook's popularity is rising high, much of what Apple is pumping out now was conceived during the Jobs era. It remains to be seen if Cook's personable brand of leadership that's winning the hearts of Apple's rank and file will be able to maintain the company's commitment to cutting edge industrial design.