In 2023, Apple CEO Tim Cook will be taking a 40% reduction in pay
According to Apple’s annual proxy statement (PDF), Tim Cook’s pay is around 40% lower than the previous year – and the CEO himself endorsed it. Apparently, at the internet giant’s annual shareholder advisory meeting in 2022, just 64% of the “Say on Pay” votes made on CEO compensation proposals were in support of keeping their 2021 pay packages. While it is still a majority of votes, it reflects a dramatic drop in approval year over year. According to 9to5Mac, 94.9 per cent of shareholders who voted the previous year approved of the CEO remuneration recommendations.
Apple’s Salary Committee included the Say on Pay voting results as well as Tim Cook’s personal decision “to alter his compensation in light of comments received” in determining this year’s pay packages. Cook’s projected compensation for 2023 is $49 million, a $35 million decrease from his target income for 2022. His basic salary stays at $3 million, and his yearly cash incentive continues at $6 million, but the amount of his stock reward has decreased from $75 million in 2022 to $40 million this year. Furthermore, he was given an equity award that is 75 per cent performance and 25 per cent time-based vesting, rather than 50-50 as in 2022.
Cook, who committed a few years ago to dedicate his money to charity, would most certainly earn more than $49 million this year owing to stock awards and bonuses. According to Bloomberg, he made $99.4 million in 2022, $15.4 million more than his annual goal compensation. His overall compensation package in 2021 was $98.7 million. Critics, such as the advice company Institutional Shareholder Services, have already encouraged shareholders to vote against Cook’s compensation package, citing concerns about the size and structure of his stock award. “Half of the grant does not include performance conditions,” the corporation previously said. Cook’s salary increase illustrates the shifting attitude regarding executive pay, and the CEO may be setting an example for his colleagues. After all, it is unusual for a senior executive to advocate that their own remuneration be reduced.