Apple CEO Tim Cook gets a 40% pay cut after shareholder vote

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Tim Cook, CEO of Apple Inc., speaks at a “First Tool-In” ceremony at the TSMC facility under construction in Phoenix, Arizona, on Tuesday, December 6, 2022.

Caitlin O’Hara | Bloomberg | Getty Images

Apple CEO Tim Cook will take a pay cut to $49 million in total compensation in 2023, the company said in a statement Submit with the SEC.

Cook requested the change, Apple said in the filing, following a shareholder vote on his pay package. The company also reduced the number of limited shares Cook would receive if he retires before 2026.

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In 2022, Cook earned just under $83 million in stock awards, $12 million in incentives and $3 million in salary. He also received benefits, including contributions to the retirement plan, security, personal air travel, and more than $46,000 in vacation payouts.

Apple’s compensation committee said it made the change in response to last year’s say-on-pay vote, in which 64% of shareholders approved Cook’s compensation, up from 95% who approved it for fiscal year 2020. Apple.

Still, Apple’s board praised Cook’s performance and expressed confidence in the CEO’s long-term strategic decisions.

Executive remuneration has recently come under increasing pressure from institutional shareholders. Institutional Shareholder Services advised Apple shareholders to vote against Cook’s compensation package at last year’s annual meeting.

The compensation committee, made up of Art Levinson, Al Gore and Andrea Jung, said it has reached out to institutional shareholders to gauge their views on Cook’s salary.

“Based on these important discussions, we have made changes to the size and structure of Tim’s compensation for 2023,” the committee wrote.

More changes may be in the offing.

“Considering Apple’s comparative size, scope and performance, the Compensation Committee also intends to position Mr. Cook’s annual target compensation for future years between the 80th and 90th percentile relative to our primary peer group,” the committee said.

Cook is usually paid in limited supply units. The number of actual shares of Apple stock that Cook acquires depends on Apple’s performance against the S&P 500. Apple’s stock has performed so well that Cook typically vests the maximum amount.

Since Cook became CEO in 2011, Apple stock is up 1,212%, versus 290% for the S&P 500, Apple said.

In addition to lowering the overall target, 75% of Cook’s vested shares will be tied to Apple’s stock performance by 2023, instead of 50%.

Apple announced a stock award for Cook in September 2020 runs through 2025. Cook received it on the first day of Apple’s fiscal year 2021, which began in late September. When approved, Cook’s stock award would have earned him 1 million shares worth about $114 million at the time if Apple met all of its targets.

Cook’s previous stock award from 2011 ended up being worth more than $900 million at Apple Stock price September 2020.

Cook said in 2015 that he plans to donate his fortune to charity.

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