Apple is targeting a cut of more than 40 percent to Tim Cook’s pay package in 2023, it said, at the chief executive’s request after shareholder criticism.
Apple’s compensation committee decided to give Cook total “target compensation” of $49 million, down from the $84 million target a year earlier, according to a regulatory filing on Thursday.
Cook’s base salary was unchanged at $3 million, as well as a bonus of up to $6 million. But the target value of his equity award will drop from $75 million in 2022 to $40 million this year, according to Apple.
The percentage of stock units given to Cook in his 2023 package tied to Apple’s performance made up 75 percent of his total stock award, up from 50 percent the year before, as some shareholders wanted Cook’s incentives more closely aligned with future growth .
Apple said Cook’s pay package is within the “80th and 90th” percentile of CEOs relative to the company’s peers.
In recent years, Cook’s net worth has jumped to $1.7 billion, according to Forbes, thanks to his mostly stock compensation as Apple shares have soared. His actual total salary in 2022 reached $99.4 million, and $98.8 million in 2021, a 500 percent increase from the $14.8 million he received the previous year.
A majority of shareholders — 64 percent — gave their approval in an advisory vote on Apple’s executive compensation packages at its annual meeting last year, but the company noted in the filing that it represented “a notable year-over-year decline, as our annual pay proposals have received much higher levels of shareholder support for many years.”
Apple said that some shareholders who did not support Apple’s executive packages “consistently cited the size and structure of the 2021 and 2022 stock awards given to Mr. Cook as the primary reason for their voting decision.”
But Apple said Cook, the former chief operating officer who succeeded the late Steve Jobs as CEO in 2011, still had broad investor support.
It said: “There was also overwhelming support for Mr Cook’s exceptional leadership and the unprecedented value he has delivered for shareholders.”
The company said in the filing that the compensation committee’s decision “balanced shareholder feedback, Apple’s exceptional performance and Mr. Cook’s recommendation to adjust his compensation based on the feedback received.”
The filing notes that Apple makes these decisions “before the start of each fiscal year,” which ended on September 24, 2022.
Apple has had a rocky few months after unrest at factories in China led it to issue a rare warning on November 6 that iPhone production would face “significant” disruptions ahead of the holiday season. Its shares have fallen more than 20 percent in the past 12 months.
Analysts have lowered revenue forecasts for the December quarter – Apple’s most profitable period – with the consensus now predicting that revenue will not match the $124 billion earned a year earlier. Such a miss would break 14-quarter growth.
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