Apple Inc. Chief Executive Officer Tim Cook speaks during a First Tool-In ceremony at the under-construction TSMC facility 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 filing with the SEC.
Cook requested the change, Apple said in the filing, after shareholders voted on his pay package. The company also reduced the number of restricted stock units Cook would receive if he retired before 2026.
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In 2022, Cook earned nearly $83 million in stock awards, $12 million in incentives, and $3 million in salaries. He also received benefits such as pension contributions, security, personal air travel and over $46,000 in vacation pay.
Apple’s compensation committee said it made the change in response to last year’s pay-on-pay vote, in which 64% of shareholders approved Cook’s compensation, versus 95% who approved it for Apple’s fiscal 2020 had.
Still, Apple’s board of directors praised Cook’s performance and said it has confidence in the CEO’s long-term strategic decisions.
Executive compensation has recently come under increasing pressure from institutional shareholders. Institutional Shareholder Services recommended Apple shareholders vote against Cook’s pay package at last year’s annual meeting.
The Compensation Committee, made up of Art Levinson, Al Gore and Andrea Jung, said it reached out to institutional shareholders to gauge how they felt about Cook’s salary.
“Based on these important discussions, we have made changes to the amount and structure of Tim’s compensation for 2023,” the committee wrote.
More changes might be in store.
“Taking into account Apple’s comparable size, scope and performance, the Compensation Committee also intends to position Mr. Cook’s annual target compensation for the coming years between the 80th and 90th percentile relative to our primary peer group,” the committee said .
Cook is paid primarily in restricted stock units. The number of actual Apple shares Cook transfers depends on Apple’s performance relative to the S&P 500. Apple stock has performed so well that Cook typically transfers the maximum amount.
Since Cook took over as CEO in 2011, Apple stock has gained 1,212%, versus 290% for the S&P 500, Apple said.
In addition to reducing the overall target, 75% of Cook’s vesting stock will be tied to Apple’s stock performance in 2023, instead of 50%.
Apple announced a stock award for Cook in September 2020 that runs through 2025. Cook received them on the first day of Apple’s fiscal 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 had met all of its goals.
Cook’s previous 2011 stock award was worth more than $900 million at Apple’s September 2020 share price.
Cook said in 2015 that he plans to donate his fortune to charity.
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