Apple penalized CEO Tim Cook for the iPhone maker's first sales slump in 15 years with a 15 percent pay cut.
The company gave the 56-year-old USD 8.75 million in total compensation last year, down from the USD 10.28 million he received in 2015, according to a Securities and Exchange (SEC) filing released yesterday.
The Cupertino, California, company cited a downturn in Apple's revenue and operating profit as the main reason it cut the pay of Cook and its other top executives. Apple specifically cited the company's failure to meet its performance goals for both sales and profits.
Cook's salary rose to USD 3 million from USD 2 million last year - a 50 per cent increase, his cash bonus took a hit. Apple awarded Cook and other executives 89.5 per cent of their target, instead of the maximum amount like in recent years. Hence, Cook's cash bonus fell to USD 5.4 million in 2016, down from USD 8 million the year before and declining for the first time since he assumed leadership of the company in 2011.
Apple's revenue dropped 8 percent to $216 billion, while its operating profit declined 16 percent to $60 billion. That was mainly because it sold fewer iPhones for the first time since the device came out in 2007.
It also marked the first time that Apple's annual revenue decreased since 2001, which was just before the company's late co-founder and CEO Steve Jobs unveiled the iPod. That digital music player set the stage for the iPhone and iPad.
Apple's rare sales slump is directly linked to the loss of momentum for the iPhone, which generates the majority of the company's sales.
Sales of iPhones have declined in each of the past three quarters, slipping to 45.5 million in the September quarter, with reports saying Apple has faced steep competition from Samsung and other smartphone makes and the newest iPhones did not feature enough upgrades to attract customers.
In October, Cook said that demand for the iPhone 7 and the bigger 7 Plus, which feature enhanced cameras and longer battery life, have outpaced supply though Apple would only report quarterly sales for those phones on January 31.
In 2016, announcing the results for the fourth quarter, Apple said it sold 45.5 million iPhones, 9.3 million iPads and 4.9 million Macs -- a year-over-year decline of 5.2 per cent for iPhones, six per cent for iPads and a massive 14 per cent for the Mac.
Apple is now eyeing hopes on iPhone 7 which was launched in September and forthcoming versions, including an expected 10th-anniversary iPhone later in 2017, that may tilt the figures in favour of Apple in the near future.