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Wednesday, May 22, 2024

Tim Cook, the CEO of Apple, took a compensation cut—a uncommon move for a CEO—after receiving criticism

Apple Inc. will reduce Chief Executive Officer Tim Cook’s remuneration by more than forty percent, to a total of forty-nine million dollars in 2023. The company will cite investor advice and Cook’s own request to decrease Cook’s pay.

In a regulatory filing made on Thursday, the firm said that as part of the adjustments, the proportion of stock units given to Cook and connected to Apple’s success would climb to 75% in 2023, up from 50% before, and will continue to increase in subsequent years as well. Cook was awarded a total remuneration package of $99.4 million for 2022, which included a basic salary of $3 million, around $83 million in stock awards, and a bonus. In 2021, his whole compensation package was worth $98.7 million, thus this represents a modest increase from that amount.

According to Apple’s statement, the business has further plans to “place Mr. Cook’s annual target remuneration between the 80th and 90th percentiles relative to our key reference group for future years.”

Cook’s prior pay package at Apple has been the subject of criticism from third-party organisations like Institutional Shareholder Services; nonetheless, the vast majority of the company’s shareholders voted in favour of it the year before. ISS, a prominent advising group, was dissatisfied with the fact that Cook’s shares would continue to vest after he retired and that fifty percent of his awards were not contingent on performance metrics such as the share price of the business.

The goal pay of $49 million is comprised of a salary of $3 million, a bonus of $6 million, and an equity award with a value of $40 million. These figures are identical to those of 2022. In 2022, the value of his stock grant came to $75 million. The exact amount of total compensation that Cook receives in 2023 can change depending on how well the company’s stock does.

Cook, who is 62 years old, has vowed to donate all of his riches to philanthropic organisations.

It is quite unusual for CEOs to suggest that they should get less pay for themselves. According to statistics provided by Bloomberg, the year 2021 was a record-setting year for CEO remuneration, despite the fact that pay packages have become more expensive.

However, shareholders have been more resistant to such packages in recent years. According to Mercer, a record number of so-called say-on-pay ballots were unsuccessful in 2021, which may have reflected shareholders’ unhappiness with how corporations operated throughout the epidemic.

Additionally, Apple published information on the salary of its Head Financial Officer Luca Maestri, General Counsel Kate Adams, retail chief Deirdre O’Brien, and Chief Operating Officer Jeff Williams for the year 2022. These executives’ total compensation in 2022, which included pay, shares, and a bonus, amounted to around $27 million. This figure represented a little rise in comparison to the previous year’s numbers.

The multinational technology corporation with headquarters in Cupertino, California, has also disclosed that the annual meeting of its shareholders would be held online on March 10.

Although the share price of Apple fell by 27% during the course of the previous year, this decrease was less severe than the one experienced by the tech-heavy Nasdaq Composite Index. They are now up 2.7% since the beginning of this year.

Jonathan James
Jonathan James
I serve as a Senior Executive Journalist of The National Era
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