Ternus' Apple Equity Award Hinges on Beating the S&P 500

Apple's new CEO John Ternus has been granted a $55 million target equity award for fiscal 2027, with 75% of it tied to Apple's total shareholder return relative to companies across the S&P 500.

The remaining $13.75 million will come through time-based RSUs vesting over four years. Ternus will also earn a $3 million annual salary and received a prorated $2.5 million RSU award for his CEO service during fiscal 2026.

According to Apple's existing executive compensation framework, the company needs to reach the 55th percentile of the S&P 500 to earn the target number of performance RSUs. This means merely increasing Apple's share price may not be enough; AAPL needs to perform well relative to hundreds of other large U.S. companies.

Ternus inherits a vastly different Apple from Tim Cook, who leaves after Apple's value climbed from roughly $350 billion to about $4.75 trillion during his tenure, with an annualized return of around 23.5%. The enormous starting valuation makes future outperformance harder.