LOS ANGELES – Apple is cutting chief executive’s Tim Cook’s compensation by more than 40 per cent to US$49 million (S$65 million) in 2023, citing investor guidance and a request from Mr Cook himself to adjust his pay.
It is rare for CEOs to recommend that their own compensation be docked. Pay packages have grown increasingly lavish, and 2021 was a record year for executive compensation, according to Bloomberg data.
But shareholders have increasingly pushed back on such packages. A record number of so-called say-on-pay votes failed in 2021, which may have reflected shareholders’ frustrations with how companies performed during the Covid-19 pandemic, according to Mercer.
As part of the changes, the percentage of stock units awarded to Mr Cook and tied to Apple’s performance will increase to 75 per cent in 2023 from 50 per cent, as well as in future years, the company said in a regulatory filing on Thursday.
For 2022, Cook received compensation of US$99.4 million, including US$3 million in base salary, about US$83 million in stock awards and a bonus. That was up slightly from 2021, when his total pay package was US$98.7 million.
His latest pay was based on “balanced shareholder feedback, Apple’s exceptional performance and a recommendation from Mr Cook”, the iPhone maker said in the filing. Apple also plans to “position Mr Cook’s annual target compensation between the 80th and 90th percentiles relative to our primary peer group for future years”, the company said.
Apple has drawn criticism from groups such as Institutional Shareholder Services about Mr Cook’s previous compensation package, but a majority of shareholders voted to approve it in 2022. ISS, a top advisory firm, complained that Mr Cook’s stock would continue to vest post-retirement and that half of the rewards did not depend on performance criteria like the company’s share price.
The US$49 million in target compensation includes the same US$3 million salary and US$6 million bonus as in 2022, as well as an equity award value of US$40 million. Mr Cook’s equity award value in 2022 was US$75 million. His actual total compensation for 2023 could fluctuate based on the company’s stock performance.
Mr Cook, 62, has pledged to give away his wealth to charitable causes.
Apple also disclosed 2022 compensation for chief financial officer Luca Maestri, general counsel Kate Adams, retail chief Deirdre O’Brien and chief operating officer Jeff Williams. Those executives were all paid about US$27 million – including salary, stock and a bonus – in 2022, slight increases from the previous year. BLOOMBERG