Apple Inc. is cutting Chief Executive Officer Tim Cook's compensation by more than 40 per cent to $49 million in 2023, citing investor guidance and a request 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 per cent in 2023 from 50 per cent, as well as in future years, the company said in a regulatory filing Thursday. For 2022, Cook received compensation of $99.4 million, including $3 million in base salary, about $83 million in stock awards and a bonus. That was up slightly from 2021, when his total pay package was $98.7 million.
Cook's 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. The company 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," Apple said.
Apple has drawn criticism from groups such as Institutional Shareholder Services about Cook's previous compensation package, but a majority of shareholders voted to approve it last year. ISS, a top advisory firm, complained that Cook's stock would continue to vest post-retirement and that half of the rewards didn't depend on performance criteria like the company's share price.
The $49 million in target compensation includes the same $3 million salary and $6 million bonus as in 2022, as well as an equity award value of $40 million. His equity award value in 2022 was $75 million. Cook's actual total compensation for 2023 could fluctuate based on the company's stock performance.
Cook, 62, has pledged to give away his wealth to charitable causes.
It's rare for CEOs to recommend their own compensation be docked. Pay packages have gotten 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 pandemic, according to Mercer.
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 $27 million "- including salary, stock and a bonus "- in 2022, slight increases from the previous year.
The Cupertino, California-based technology giant also announced that its annual shareholder meeting will take place virtually on March 10.
Apple shares declined 27 per cent last year, though that was less of a drop than the one suffered by the tech-heavy Nasdaq Composite Index. They've climbed 2.7 per cent so far this year.