Tim Cook’s 3-year report card at Apple: B

Tim Cook onstage at the 2014 WWDC. Photo: Roberto Baldwin/The Next Web

Tim Cook onstage at the 2014 WWDC. Photo: Roberto Baldwin/The Next Web

Tim Cook stepped up as the CEO of Apple on August 24, 2011. The soft-spoken Southerner, who has worked at the Cupertino company since 1998,  had previously acted as interim CEO when Steve Jobs stepped down to battle cancer.

Cook’s ascent to the permanent CEO position marked a sea change for Apple. Once called the stage manager to Jobs’ star, he’s now running the show. After endless speculation about whether Cook’s rule marked the end of Apple or signaled a bright new era, going by the numbers, it looks like he’s earned a solid B.

Here’s a look at his first three years as the head of Apple, a job he got paid $4.25 million to perform in 2013.

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Overall financial health: B-

There are dozens of financial metrics to evaluate a company – we’re going to sum that all up with whether you should own stock in it. The answer from the experts who crunch the numbers on revenue, earnings, profit margins, etc. is, uh, yeah. Get a piece of Apple.

Morningstar, which rates Apple stock 3/5 stars, notes that the maker of all iThings has far outperformed the industry average in the last three years. After the 7-1 stock split in June, stock price soared past the previous record just in time for Cook to celebrate his anniversary running the company. If Cook missed the mark by any measure, it may be that his knack for innovation is still in question.

“So is Apple making an impact? I’d say they are sustaining their position rather well and if that’s all there was, Tim Cook deserves a B,” industry analyst Horace Dediu told Cult of Mac. “But to be truly impactful still requires a successful new product that “makes a dent in the universe” which has not happened in the last few years. In that sense, he has not yet completed his thesis and the grade today is therefore an Incomplete.”

Environmental responsibility: B-

Less than a decade ago, Greenpeace singled out Apple as one of the least environmentally friendly tech companies on the planet. Apple has since turned over a new leaf, embracing environmentalism as something every bit as central to the company as the latest iPhone. Cook underlined this when he spoke about Apple being a “force for good” during an earnings call this year.

“Previously Apple would have scored a D in environmental responsibility,” Elizabeth O’Connell, campaign director for Green America, told Cult of Mac. The 80-strong group of environmental and human-rights organizations fired off a 17-page letter to Lisa Jackson, Apple’s vice president of environmental affairs, back in June as part of its “Bad Apple” campaign. Some 23,0000 signatures later, Apple responded that it would stop using those harmful chemicals in the iPhone manufacturing process.

“In the past few years, Apple has instituted policies to reduce its corporate facilities’ reliance on fossil fuels, make its products more energy efficient, reduce the amount of toxins in its products, and make it possible to easily recycle old Apple products at Apple stores — earning Apple a B- for environmental responsibility,” she says.

O’Connell adds that, while Apple has made “significant progress” on environmental issues under Cook and with Jackson, there’s still much room for improvement.

To improve its “grade,” the company still needs to reduce its carbon footprint at manufacturing facilities (where the bulk of its greenhouse gases are emitted), reduce the amount of toxins used in manufacturing to protect workers and design its products for longer use and easier repair.

Worker’s rights: D

In 2012, when The New York Times dug into the dangerous factory conditions in China, things looked grim. The Gray Lady unearthed stories of workers getting killed and maimed in the process making of iPhones. Cook didn’t respond effectively to the accusations, with a leaked memo showing his frayed temper. “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.” And while the worker’s rights reports that Apple has been publishing since 2007 have shown improvement in these conditions, it’s just not enough.

“Apple still earns a D for worker rights — both overseas and at their retail stores in the United States,” O’Connell says.

Acquisitions: A-

Under Tim Cook,  acquisitions at Apple are up 64 percent. The $3 billion paid August 1 for Beats Electronics dwarfs the rest of the companies Apple has taken into the fold. Many questioned whether the company’s move was a wise one. It’s definitely a bold move — the company’s largest acquisition ever — but because of Apple’s “healthy cash and investments balances” the buy won’t “strain Apple’s liquidity” or knock down its Moody’s Aa1 rating. The investor’s service expects the buy to bring “modest revenue growth opportunities” for Apple, too, including a future in wearables and in-home tech markets.

Cook is definitely setting a new pace for acqui-innovation at the company, where buys include everything from AlgoTrip (data compression) to Topsy (analytics) and Swell (music streaming). These types of deals set the rumor mill aflame with speculation about what Apple will be cooking up next. There have been criticisms of the piecemeal nature of these buys, but the CEO maintains there’s a strategy behind it. “We generally do it for skills or IP [intellectual property],” Cook said at a 2013 conference.”And we generally move the skills to work on something else.”

Employee approval rating: A-

Cook’s highest “grade” on this hypothetical report card may come from Apple employees. Though the lanky 53-year-old is reportedly short on small talk, his people skills have earned him a 93 percent approval rating from a sampling of almost 2,000 people who work at Apple on website Glassdoor, where anonymous employees can rate their satisfaction with the overall work environment as well as give thumbs up or down for the CEO. If the brightest minds in tech want to work with him, that may be all the insurance Apple needs for a bright future.

“In my opinion the measure of a technology CEO’s performance today would be their ability to retain and incentivize talent,” analyst Dediu says, adding that it’s not so simple to dole out report cards to CEOs like we do for second-graders. “Talent is far more difficult to obtain and retain than capital or property. The basic question of number of employees and their willingness to devote so much energy to their company is at the heart of sustainable growth.”

  • Dan

    I guess one CAN debate about whether the financial health of a company is best represented by how investors feel about its direction, as opposed to net profits, cash on hand, debt possessed, and many other metrics that more directly relate to actual financial health. You seem to have chosen the single metric upon which Apple is not leading the industry (and that is most susceptible to manipulation by FUD) upon which to base this category. I think Tim Cook deserves a solid A for shepherding Apple into the largest, most profitable technology company in the world, without sacrificing the core values established by Jobs. I wouldn’t quibble with an A-, given concerns about new product categories not yet clearly being apparent, but c’mon: you really think Cook’s Apple deserves a B- for the being most successful tech company on the planet? Get real!

    Also, given that the NYT articles were hit pieces that held Apple to standards NO OTHER tech company or manufacturer comes close to matching, and despite Apple’s having to insist that Chinese manufacturers change previous practices to get and keep their business, giving a Cook a D grade without context is disingenuous at best. And no context is given about the “retail stores” in the US comment either. Somehow, I doubt that US Apple retail store workers would agree with the grade that has been assigned by Green America’s campaign director to them or Cook’s leadership of them, if that’s the actual grade intended–the actual meaning in your article is unclear.

    What is clear is that the campaign director of Green America has an agenda to highlight awareness of the issues important to her by assigning controversial and highly debatable scores, and by sympathetically going along with this agenda without giving a broader context (of Apple leading the industry in best practices for workers), your article appears blatantly unfair.

    Is Apple or Tim Cook’s performance perfect? Of course not, and I’m not suggesting that they deserve stellar scores across the board. I think the other categories are fairly represented. But the financial health and worker rights scores really do seem unrealistic and unfair, given what Apple has accomplished under Tim Cook so far.

  • CelestialTerrestrial

    I would have given him a lower grade for several reasons. 1. Since Tim Cook became CEO, the Net Profits have gone down. 2. The product announcements have, for the most part, been pushed back to the end of the year. 3. Buying Beats and letting Iovine and Dre in top management at Apple. Both of them have no business being with Apple. I can see no good coming from their capabilities other than catering to idiots that don’t like REAL music. 4. Buying back shares and putting the company into debt to do it was a mistake.

    • Gregg_Thurman

      What grade would you assign Microsoft, Google, Dell, Motorola, Nokia, Samsung, Sony, HTC, Blackberry, Xiaomi, Lenovo, et al, only one of which is making a profit in mobile? Which have introduced a new product category since Motorola’s cellphone?
      Share buyback opinion dismissed. You obviously have never managed anything larger than a lemonade stand.

    • AAPL_@_$101_Is_A_Done_Deal_:)

      Please explain why Iovine and Dr. Dre have no right to be in top management at Apple when they had their own profitable company which must have proved they had some talent for management.

  • digitaldumdum

    “Tim Cook’s Three-Year Report Card At Apple: B”

    This editor-written “report card” is just plain silly. I enjoy Cult of Mac, but really, these assembled “facts and figures” do not even begin to tell the story of Apple’s health, or the performance of Tim Cook.

    Few men or women in history have taken the reigns of such a vast and complicated company. Apple is a juggernaut, and I’d suggest that •no one• could assume the top job and do a better job given the endless daily, weekly and future challenges. Besides, how much better does Apple need to do, how much more does it have to grow and how many more world-changing technologies does it have to provide before it’s proved itself to the public and shareholders? Cult of Mac only exists because of the popularity of Apple. My portfolio is the better for having some stock (as is yours, I suspect.) And all our lives have been impacted for the better… even the many Chinese workers who assemble the products. If they’re not earning as much as American workers, and their working conditions aren’t as good, they’re a damn sight better than they were before Tim Cook got involved. And as for environmental grading, I believe Apple constantly strives to be environmentally conscious, and always has. Remember, requirements continually change, as do our own attitudes. Apple adapts, and often leads the way. The company is not perfect in these regards, but it’s certainly better than most.

    I just think the game of “grading” leads to a slippery slope, and serves no real purpose other than to get taps and clicks.

    Respectfully,
    DD

    • Gregg_Thurman

      The game of “grading” is just plain stupid. Those doing the “grading” couldn’t manage the firm as well as current management.
      This article is nothing more that ‘click bait’ to drive Cult of Mac ad revenue.
      Its a shame that editors seek out fluff to bolster revenues, vs doing real research. But that’s the internet world we live in today, controversy over substance.

      This post represents my last visit to a hit whore.

  • Gregg_Thurman

    Apply the same metrics to Microsoft, Google, Dell, Motorola, Nokia, Samsung, Sony, HTC, Blackberry, Xiaomi, Lenovo, et al, and by comparison Apple gets an A++.

  • JDSoCal

    Wow, I won’t be using Cult of Mac for a financial adviser. Morningstar? Environment? Workers rights? Employee approval rating? WHO CARES??!?! How about average annual return to investors? You know, the whole purpose of a publicly held corporation?

    This site has zero value for an Apple stockholder. Might as well read the Daily Kos for left wing drivel.

  • Kevin

    Just imagine his grade after september….AAA+++…Well, I hope. btw; the images of the iPhone 6 look ugly as hell. Hope it’s not the final design. And on that same note, it would help Tim a lot if he not only doubled down on secrecy, but he quadrupled down on it.

  • Wayne Margot

    “If the brightest minds in tech want to work with him, that may be all the *insurance* Apple needs for a bright future.”

    Assurance, not insurance. To me this means that Siri is on the prowl here. That is a good thing.

  • aardman

    Stupid, click baiting, load of shite article for all the reasons mentioned and then some.

  • jameskatt

    Another ANALyst gives his point of view. I strongly disagree. And I am an Apple stockholder. Tim Cook has been running Apple for YEARS, even when Steve Jobs was the CEO. Tim Cook’s work is a solid A+.

    1. Overall Financial Health: A++ Anyone who gives a B- obviously doesn’t know Apple and how it compares to the rest of the industry. Apple is a huge money making machine. It earns so much it can’t spend it all. Carl Icahn and Warren Buffett both approve of Tim Cook’s job. A very solid A++.

    2. Environmental Responsibility: This isn’t even in Steve Jobs’ horizon. Tim Cook has done more than any other tech CEO for environmental responsibility. He deserves an A++

    3. Worker’s Rights: Yeah right. B.S. The rate of suicide’s in Apple’s Chinese factories is lower than in the rest of China. And it certainly polices it more heartily than any other tech company – even Samsung. Tim Cook earns a solid A++ here. Any other garde is B.S.

    4. Acquisitions: A++ Apple never wastes its money like other tech companies. And Apple invested its Acquisition money on buying the most valuable company in the world: Apple. Can’t go wrong with that. Tim Cook is a super solid A++.

    5. Employee Approval Rating: A++ Tim Cook has a lifetime job at Apple as CEO. Period.

  • Adult Supervisor

    Who the phuk are you to be grading Tim Cook? A lightweight journalist with no pedigree judging one of the top CEOs of our time. Laughable.

About the author

Nicole MartinelliNicole Martinelli heads up Cult of Mac Magazine, our weekly publication available on iTunes. You can find her on Twitter and Google+. If you're doing something new, cool and Apple-related, email her.

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