Apple CEO, Tim Cook takes 15% pay cut for missing sales target

iPhone maker, Apple is cutting CEO, Tim Cook's pay by 15% citing the company's failure to meet its performance goals for both sales and profits. This is because iPhone sales last year caused Apple to suffer its first annual revenue decline in 15 years.
Apple's board is now holding its CEO and other leaders accountable for the stumbles.
While Cook's salary rose to $3 million from $2 million last year, his cash bonus took a hit. Apple awarded Cook and other executives 89.5% of their target, instead of the maximum amount like in recent years.
That meant Cook's cash bonus fell to $5.4 million in 2016, down from $8 million the year before.
Cook's total compensation was $8.7 million last year, compared with $10.3 million in 2015.
Sales of iPhones have declined in each of the past three quarters, slipping to 45.5 million in the September quarter. The problem is that Apple has faced competition from Samsung and other smartphone makers and the newest iPhones haven't featured enough upgrades to lure customers.

Behold the Apple's new iPhone 7 - Contains 256GB of storage

Apple Inc. announced on Wednesday the upgrade of its flagship product, the smartphone known as iPhone, with new features such as water resistance, double-lens camera, stereo speakers and wireless headphone.

Along with the new iPhone 7, which will be available for pre-order on Friday and for delivery starting a week later, Apple said at an event in San Francisco, northern California, that it had upgraded its smart watch, known as Apple Watch, to be water resistant.

However, away from its description in the initial offering of the watch nearly two years ago, when Chief Executive Officer Tim Cook called the product "a collection," Apple renamed the previous version "Series 1" and the new wearable "Series 2", which includes global positioning system (GPS) function.

Apple Watch, once expected to catch up with the popularity enjoyed by iPhone, has extended its working with luxury brand Hermes and sports brand Nike by highlighting features of the two brand names.

About the iPhone, the new series has a new A10 central processing unit (CPU) chip with 4 cores to run hardware and software operations, improved battery life that is claimed to last two more hours on average than iPhone 6.

Significant changes to the hardware include the elimination of headphone jack; the introduction of AirPod, a wireless headphone with 5 hours of battery life on each charge; the two speakers imbedded to replay stereo sound; and the camera with a wide-angel lens and a telephoto lens to better suit different situations.

Compared with previous Apple events of the kind, the technology company headquartered in Cupertino, south of San Francisco, brought fewer executives onto the stage, and the response seemed to be less enthusiastic off the stage.

Cook, like in the past five years, did speak as a host at the two-hour event on Wednesday, but he and other Apple officials did not mention the company's other products, which include iPad tablet and MacBook notebook and Macintosh desktop computers.

In a video clip shown at the beginning of the event, Cook seemed to be in the passenger seat of a vehicle and on the way to Bill Graham Civic Auditorium, San Francisco, where the event was held, and the driver talked about the security of iPhone 7 and called it the best. Cook agreed. But he did not discussed the topic once within the auditorium.

Apple has bragged about security features of its products, especially iPhone. Earlier this year, when it refused to work with the Federal Bureau of Investigation (FBI) to access an iPhone 5c used by one of the two gunmen in the San Bernardino, California, terror attack on December 2, 2015, Cook opened his speech at a similar event in late March by talking about data security.

"We believe strongly that we have a responsibility to help you protect your data and protect your privacy," he said then.

However, the U.S. Department of Justice (DOJ), which runs the FBI, on the same day scraped its request for Apple's assistance at a federal court and said a week later it had retrieved the data from the phone in question.

In the months thereafter, there have been reports about vulnerabilities in iPhone's operating system iOS that could expose users to hackers.

Why Ireland's Government Doesn't Want Apple's Money

Ireland’s finance minister is so angry that he’s willing to fight the European Commission all the way through the courts for the right not to collect the taxes that Apple supposedly avoided over the last 12 years. Darn it, he’s already spent over 670,000 euros ($750,000) of taxpayers’ money in fighting the Commission. Why the ingratitude?

It’s not like his voters or his cabinet colleagues don’t want the money. After six years of austerity imposed as part of Ireland’s 2010 bailout, Ireland’s public sector in particular is gasping for it.

Moreover, Noonan is going to get it in the neck from his rivals if he doesn’t take the money. Pearse Doherty, the finance spokesman for Sinn Fein, which preaches an idiosyncratic cocktail of nationalism and left-wing populism, called on the government not to appeal the ruling, telling the newspaper Anphoblacht: “There’s an irony here when we see an Irish Government challenging the European Commission when they actually bowed down to the same Commission during the period of austerity and bank bailouts.”

“Many people will be mindful that they themselves will be taken before an Irish Court because of their failure to pay water charges, yet this same Government are willing to go to court to defend Apple,” Doherty said.

Sinn Fein would love it to be that simple. However, even its Marxist old guard would probably have to accept that the ruling is a devastating blow to a country that has thrived for decades on attracting foreign investment through its favorable tax regime: the stock of foreign direct investment in Ireland at the end of 2014 was 311 billion euros ($350 billion), or 165% of GDP. Facebook and Google and many others have their European headquarters in Ireland, due mainly to its 12.5% headline rate of corporate income tax—the lowest in the EU.

If Noonan now enforces the Commission’s ruling, it will send a chilling message to other companies that have either invested in Ireland in the past, or were thinking of doing so in the future.

Small wonder that Noonan told state broadcaster RTE that: “It is important that we send a strong message that Ireland remains an attractive and stable location of choice for long-term substantive investment.” He said a challenge was needed “to defend the integrity of our tax system, to provide tax certainty to business, and to challenge the encroachment of the EU state aid rules.”

That second half of Noonan’s statement is important. For although the Commission zeroed in on what it thought it to be a very specific abuse of Ireland’s tax code, the Irish government is clearly afraid that this ruling will be the thin end of a wedge that ends in its complete loss of sovereignty over setting its own tax rates.

Until this year, such sovereignty hadn’t seemed in danger: after all, the government had successfully resisted the attacks on its tax code during the 2010 bailout negotiations, when it was at the mercy of France and Germany. The two countries had the best opportunity in years to stop Ireland luring away investment—and budget revenues—by “racing others to the bottom.” At that time, the government of Taoiseach Enda Kenny had successfully argued that its tax code was the only thing keeping the Irish economy alive—and thus the only way the creditors would ever see their 78 billion euros in bailout loans again (to say nothing of another 130 billion euros and more lent to Irish banks by the ECB at the height of the crisis).

But times change. And even though it happened years after the alleged offense, the U.K.’s decision to leave the EU puts today’s ruling in an entirely different light. As long as the U.K. was part of the EU, it was a waste of everyone’s time and energy to even propose the greater centralization of powers over tax in Brussels. With the Brits gone, the Irish have lost their biggest protector. What was impossible becomes possible (at least if France and Germany agree on an approach that somehow suits them both, which admittedly remains a tall order).

The Commission’s press release itself contains a hint of where the first attack on Ireland’s tax sovereignty could come from.

“In fact, the tax treatment in Ireland enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market. This is due to Apple’s decision to record all sales in Ireland rather than in the countries where the products were sold. This structure is however outside the remit of EU state aid control. If other countries were to require Apple to pay more tax on profits of the two companies over the same period under their national taxation rules, this would reduce the amount to be recovered by Ireland.”

In other words, the Commission is inviting other member states to calculate how much they may have lost in tax revenue as a result of the alleged violations, and to claw it back from Ireland. That alone is good reason for Noonan to challenge the ruling. The last thing he or any Irish government wants is to establish that kind of precedent.

At least Noonan’s Fine Gael party has some support from Fianna Fail, the party that has ruled Ireland for most of the last century (perhaps unsurprisingly, given that a string of Fianna Fail governments devised and presided over the said scheme for years).

“The Commission has opened the door to other countries including the U.S. to seek a slice of the 13 billion euros,” finance spokesman Michael McGrath said in a press statement. “It would be deeply unwise of Ireland to make any plans for funds that may not even materialize in reality.”

Europe hits Apple with $14.6 billion tax bill

Ireland must recover up to 13 billion euros ($14.6 billion) in unpaid taxes from Apple, Europe's top regulator ruled on Tuesday.

 

The tax ruling is by far the biggest the European Union has ever made regarding a single company, and it could spark a huge transatlantic row over how Europe treats big U.S. companies.

Apple shares fell almost 3% in premarket trading. The company will appeal the decision. It said the ruling upended the international tax system and would damage jobs and investment in Europe. Ireland also intends to appeal.

The Commission said the Irish government had granted illegal state aid to Apple (AAPL, Tech30) by helping the tech giant to artificially lower its tax bill for more than 20 years. 

"Member States cannot give tax benefits to selected companies -- this is illegal under EU state aid rules," said Commissioner Margrethe Vestager, Europe's top antitrust official.

Apple paid tax at 1%, or less, on profits attributed to its subsidiaries in Ireland, well below the 35% top rate in the United States and even well below Ireland's 12.5% rate. 

That prompted complaints by both European and U.S. lawmakers, who argued the deal gave Apple an unfair advantage in exchange for creating jobs in Ireland. CEO Tim Cook was even called to testify on Apple's tax deal before a Senate committee in 2013.

The bill for tax benefits, plus interest, covers 2003 to 2014. Apple has more than $231 billion in cash on its balance sheet to cushion the blow.

Apple (AAPL, Tech30) is not the only American company that has recently found itself under scrutiny over its European tax affairs.

The European Commission ordered Starbucks and Fiat Chrysler to repay millions in taxes last October.

Starbucks (SBUX) has to pay back up to 30 million euros it saved thanks to a sweetheart tax deal with the Netherlands. Fiat Chrysler (FCAM) was ordered to repay a similar amount after a similar deal with Luxembourg.

Both companies have appealed the decisions. 

The EU is also probing the tax arrangements of Amazon (AMZN, Tech30) and McDonald's (MCD). Google (GOOG) is under investigation over its taxes in France and a couple of other European countries.

The ruling against Apple's tax deal comes despite a stern warning from the U.S. last week. The Treasury Department urged the European Commission to stop its tax crackdown on American companies, saying it would consider "potential responses" if Brussels doesn't change course.

Apple takes incremental steps For Long-Term Success

As the reveal of the iPhone 7 family of smartphones approaches, Apple’s 2016′s iteration of the smartphone is looking more and more like a stop-gap than a true leap forward. Apple may have the ability to create the strongest human connection possible to a slice of silicon, but it cannot alter the insatiable demand for a new phone every 12 months. At best it can bluff and prevaricate while it works on the real game-changers that can take up to three years to arrive.

But these features are targeted not at 2016′s iPhone 7 but the tenth-anniversary iPhone that will arrive in September 2017.

In September, Apple will take to the stage and Tim Cook will anoint the iPhone 7 as ‘the best iPhone we have ever made’, and he would be right. The cheat is that Apple has the technology to make a better smartphone than the one it is making (and similar technology is available on competing handsets). No matter the platitudes and digital inches highlighting the new features, there is something better in the offing.

The technology is only iteratively better than that available on the iPhone 6S, and it’s clear that Tim Cook’s team believes that the big changes are not ready to be offered to the customer base.

It’s not that kind of world. It’s a world where the average mobile contract lasts two years so a new handset needs to be available as the contract ends to satisfy the network demands to retain customers and the manufacturers’ need to keep customers from switching ecosystems. It’s a world where two quarters of falling sales signals the death knell of the company, irrespective of the obvious long-term plans.  And it’s a world where the iPhone ‘S’ models are a barely concealed fudge to satisfy the short-term hunger of sales and Wall Street with the need to extend the development time of ‘the next changes’ out to two years.

Now it looks like the technology required to advance the iPhone 6 to the iPhone ‘next generation’ needs another twelve months, forcing the turnaround time out to three years between notable models. That timescale does not meet the expectations of today’s cut-throat mobile industry.

This, however leaves us with the iPhone 7 – a handset that has a few token updates in the hardware and the usual increase thanks to Moore’s Law in the chipset specifications. The demands to ‘do something’ every year, to satisfy sales projections and quarterly demands, to be seen to be ‘thinking different’ and rejuvenating the industry every year is a herculean task. It’s one that Apple struggles with just as much as the next manufacturer (which is likely Samsung).

Apple cannot pull the focus of the market away from the 12-month cycle, and the iPhone 7 is a symptom of a market that simply does not fit Apple’s way of working. I’m happy with the idea that Apple needs three years to develop its next iPhone. So, apparently, is Apple. Unfortunately everyone else demands a new handset every year.

So let’s get ready for the iPhone 7, Apple’s obligation to the marketplace.

Approved and Confirmed! La Casera Apple Drink certified Good for Consumption

Consumers can now continue to enjoy their “king of the road real apple drink” as all malicious rumour on La Casera Apple Drink has been laid to rest as NAFDAC, SON and MAN hit their gavel on the wholesomeness of Nigeria’s 1^st Carbonated Soft Drink (CSD) in PET bottle- La Casera.

This bold declaration was made yesterday while officials from these agencies and the media visited the ultra modern multi billion Naira production facility of the La Casera Company, which no doubt dispelled all negative insinuations, and restated emphatically that La Casera is good for consumption.

Director General of NAFDAC who was duly represented by her Special Assistant, William Effiok, expressed great delight at the company’s level of compliance and strict adherence to modern food and beverage production guidelines, he also stated his satisfaction with the firm’s seamless production process flow which eliminated human interference to the highest degree right from its ingredient mixing unit down to product stacking and storage in its warehouse.

“Food handling and contact is the major cause of product contamination in food processing, and with a system such as this in place, it is remarkably obvious that La Casera apple drink is manufactured under the strictest hygiene condition, and with its NAFDAC certification earned over the years, we hereby restate that La Casera drink is wholesome and fit for consumption by the general public” stated William.

On his part, the Director, Product Certification, Standards Organization of Nigeria (SON), Bayo Adigun, also commended the management of La Casera for its doggedness and stand even in times of national economic challenges such as this.

“La Casera’ approval by SON is not in question in any way, and what we have witnessed here today further buttresses why La Casera remains a trusted brand in the Nigeria Beverage industry” said Adigun.”

Acting DG, Manufacturers Association of Nigeria (MAN),  Segun Ajayi-Kadir in his remark said The La Casera Company which has been in Nigeria since the year 2000 is an example of a visionary company, and cannot be compared to several ‘flight’ companies which in the face of slight provocation, throw in the towel, close shop and jet out of the country. He therefore informed Nigerians to dismiss any unfounded rumour about the products from the La Casera Company, as it is endorsed by NAFDAC and SON.

In closing, the Managing Director of the La Casera Company, Roland Ebelt reiterated La Casera’s commitment to producing high quality products to its consumers, even as its production line from start to finish is free of human contact.