Apple chief executive Tim Cook is set to see his pay reduced by almost 50% this year to around $49m (£40m) after the billionaire boss told the company to ‘adjust his compensation” in light of comments from disappointed shareholders at the company’s declining share price.
Cook, 62, who became CEO after co-founder Steve Jobs resigned before his death in 2011, was paid $99.4 million in 2022 and $98.8 million in 2021. But the company said in a regulatory filing late Thursday night that it had set a “target compensation” of $49 million for 2023.
“The Compensation Committee balanced shareholder feedback, Apple’s outstanding performance, and a recommendation from Mr. Cook to adjust his compensation in light of feedback received,” Apple said in the filing.
Cook’s annual base salary and bonus will remain unchanged at $3 million and $6 million respectively. But the “targeted” amount that will be awarded to him in the form of stock bonuses will increase from $75 million last year to $40 million next year.
The amount awarded in stock bonuses will also be more dependent on Apple’s share price performance than it was last year. Now, 75% of the stock bonus depends on Apple’s stock market performance, up from 50% last year.
Apple shares have fallen 23% in the past 12 months to $133.41 as of Thursday’s close, raising concerns among some shareholders.
The company said 64% of shareholders backed its compensation plans at its annual meeting last year, but acknowledged there had been “a noticeable decline year-over-year as our proposals annual “pay vote” have received much higher levels of shareholder support for many years.
Last year, shareholder advisory service Institutional Shareholder Services urged investors to vote against Cook’s salary package, saying there were “significant concerns” about the package’s “design and scale”. ISS pointed out that Cook was paid 1,447 times more than the average Apple employee.
Apple said it reached out to investors to hear their concerns. “Shareholders we spoke with who did not support our 2022 ‘pay vote’ proposal consistently cited the size and structure of the 2021 and 2022 equity awards granted to Mr. Cook as their primary reason. of their voting decision,” the company said.
“Balancing shareholder feedback, the desire to continue to create meaningful performance and retention incentives, and Mr. Cook’s support for changes to his compensation to reflect the feedback received, the Compensation Committee maintained the cash components of Mr. Cook’s compensation for 2023 and reduced his target equity. reward the value of the grant,” he added.
Cook’s total salary of $99.4 million last year included $630,600 in personal security costs and $712,500 for use of a private jet. His 2022 salary was slightly higher than the $98.8 million he received in 2021, but it was more than 570% higher than the $14.7 million he received in 2020.
Cook, who sits on a personal fortune of more than $1 billion, according to the Bloomberg Billionaires Index, said he plans to give away his entire fortune before he dies. In 2015, he told Fortune magazine that he planned to donate all his wealth to charity after providing education for his then 10-year-old nephew.