Apple shareholders have complained about the stratospheric compensation of the company’s CEO, Tim Cook. Steve Jobs’ successor at the head of the iPhone manufacturer has decided to pay heed to these criticisms and recommended that his salary be lowered. The target for his 2023 compensation has been cut by 40% to $49 million. In 2022, that figure was set at $84 million dollars, but as Apple’s performance exceeded expectations, Cook ended up receiving $99.4 million, according to the company’s SEC fillings.
In 2021, Cook’s total pay package was $98.7 million, which sparked criticism from investors and shareholders. At last year’s general meeting, shareholder support in the advisory vote on executive pay plummeted from 95% to 64%. Setting an even higher salary for 2023 after the company’s shares fell nearly 30% last year was going to fuel further criticism, and to avoid this, Cook recommended the pay cut.
“The Compensation Committee balanced shareholder feedback, Apple’s exceptional performance, and a recommendation from Mr Cook to adjust his compensation in light of the feedback received,” Apple said in a filing with the US financial watchdog.
Cook’s annual base salary remains unchanged at $3 million, as well as a bonus of up to $6 million. But under the new package, his stock award target has been cut from $75 million to $40 million. What’s more, 75% of that award will depend on Apple’s share performance.
The filing, which announces Apple’s next Annual Meeting on March 10, states that Cook backed these changes. “The Compensation Committee then approved the [...] following changes to CEO compensation, which Mr. Cook supported, and that the Compensation Committee believes are responsive to shareholder feedback, while continuing both to align pay with performance and to recognize Mr. Cook’s outstanding leadership.”
The document also details the compensation package Cook received in 2022. That year, the CEO was awarded a base salary of $3 million plus $83 million in stock awards and a bonus: a total of $98 million. Cook also received an additional $1.4 million in other compensation, which covers his pension plan, life insurance, vacation expenses ($46,154), security costs (591,196) and personal travel in private jets (767,319). “In the interests of security and efficiency based on our global profile and the highly visible nature of Mr. Cook’s role as CEO, the Board also requires that Mr. Cook use private aircraft for all business and personal travel,” the filing states.
Apple’s four other highest-paid executives – Luca Maestri, chief financial officer; Kate Adams, general counsel and secretary; Deirdre O’Brien, senior vice; and Jeff Williams, chief operating officer – received $27.15 million each in 2022. No pay cut has been planned for these executives, although their compensation depends on Apple’s share performance.
The salary of a non-executive director was around $400,000 in 2022. Art Levinson, the chair of the board, was awarded $562,000.
The SEC document includes shareholder proposals to be voted on at the next Annual Meeting, including the Communist China Audit, which requests that Apple “report annually to shareholders on the nature and extent to which corporate operations depend on, and are vulnerable to, Communist China, which is a serial human rights violator, a geopolitical threat, and an adversary to the United States.” Apple has recommended voting against the proposal.
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