Apple CEO Tim Cook asks for a big cut in compensation
Mario Tama
Say-on-Pay votes rarely get internalized by company executives and the board, but something new is brewing at Apple (NASDAQ:AAPL). The compensation committee and CEO Tim Cook have decided to reduce his annual compensation by 40% for 2023 in response to shareholder criticism. While his $3M base salary and $6M bonus will remain the same, the total amount of equity awards available will decrease from $75M to $40M, putting his total payout target at $49M.
Other changes: The percentage of Cook's stock units linked to Apple's (AAPL) performance will make up 75% of his overall equity award, up from 50% in 2022. That will more closely align his incentives with future growth performance instead of time spent at the company. Apple (AAPL) also lowered the number of restricted stock units Cook would receive if he retires before 2026.
"The Compensation Committee balanced shareholder feedback, Apple's exceptional performance, and a recommendation from Mr. Cook to adjust his compensation in light of the feedback received," Apple revealed in an SEC filing. "Taking into consideration Apple’s comparative size, scope, and performance, the Compensation Committee also intends to position Mr. Cook's annual target compensation between the 80th and 90th percentiles relative to our primary peer group for future years."
Go deeper: Executive compensation was a big discussion at last year's annual meeting, when Institutional Shareholder Services recommended that Apple (AAPL) shareholders vote against Cook's pay package. There has been some increasing pressure since then, especially as Apple (AAPL) deals with supply problems in China, weakening tech demand and the possibility of breaking its 3.5-year growth streak over the holiday quarter. While shares of Apple (AAPL) are up 6% YTD, they have fallen 24% over the past year, compared to the 27% decline of the tech-heavy Nasdaq Composite Index.