Apple is cutting Chief Executive Officer Tim Cook’s compensation by more than 40% to $49 million in 2023, citing investor guidance and requests from Cook himself to adjust his pay.
As part of the changes, the percentage of stock units awarded to Cook and tied to Apple’s performance will increase to 75% in 2023 from 50%, as well as in future years, the company said in a regulatory filing Thursday. For 2022, Cook received $99.4 million in compensation, including $3 million in base salary, about $83 million in stock awards and bonuses. That’s a slight increase from 2021, when the total pay package was $98.7 million.
Cook’s latest payout is based on “balanced shareholder feedback, Apple’s exceptional performance and recommendations from Mr. Cook,” the iPhone maker said in the filing. The company also plans to “position Mr. Cook’s annual compensation target between the 80th and 90th percentile relative to our primary peer group for the future,” Apple said.
Apple has drawn criticism from groups such as Institutional Shareholder Services over Cook’s compensation package in the past, but a majority of shareholders voted to approve it last year. ISS, the top advisory firm, complained that Cook’s stock would continue to vest after his retirement and that half of the reward would not depend on performance criteria like the company’s stock price.
The $49 million target compensation includes the same $3 million salary and $6 million bonus as in 2022, as well as $40 million worth of equity awards. The value of the equity award in 2022 is $75 million. Cook’s total actual compensation for 2023 may fluctuate based on the performance of the company’s stock.
Cook, 62, has pledged to give away his wealth to charity.
It is rare for CEOs to make their own compensation recommendations. Pay packages are on the rise, and 2021 is a record year for executive compensation, according to Bloomberg data.
But shareholders are increasingly pushing back on the package. A record number of so-called say-on-pay votes failed in 2021, which may reflect shareholder frustration with how companies have performed during the pandemic, according to Mercer.
Apple also announced 2022 compensation for Chief Financial Officer Luca Maestri, General Counsel Kate Adams, retail leader Deirdre O’Brien and Chief Operating Officer Jeff Williams. The executives were all paid about $27 million — including salary, stock and bonuses — in 2022, a slight increase from the previous year.
The Cupertino, California-based tech giant also announced that its annual shareholder meeting will take place on March 10.
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