Apple Inc. announced in a regulatory filing that CEO Tim Cook will see a significant decrease in his pay for the upcoming year, as the company adjusts its calculation method for executive compensation. According to the filing, Cook’s total target compensation for 2023 is $49 million, which includes a $3 million salary, $6 million cash incentive, and $40 million in equity awards. This marks a decrease of over 40% from the previous year.
The changes to Cook’s compensation were partly based on a recommendation from Cook himself, and also took into account feedback from shareholders, the company’s performance, and Cook’s own performance as CEO. Apple conducted an advisory shareholder vote on executive pay last March, with 6.21 billion shares voting in favor of the executive pay package and 3.44 billion against. There were also abstentions and broker non-votes.
Apple said its compensation committee took into account shareholder feedback, the company’s performance and a recommendation from Cook, who was promoted to CEO in 2011, to adjust his compensation in light of the feedback received. The company explained that last year it sought feedback from shareholders about compensation and it received “overwhelming support for Mr. Cook’s exceptional leadership and the unprecedented value he has delivered for shareholders.”
Those shareholders we spoke with that did not support our 2022 Say on Pay proposal consistently cited the size and structure of the 2021 and 2022 equity awards granted to Mr. Cook as the primary reason for their voting decision,” the company said. Cook has received a $3 million base salary for the past three years, but his total compensation — which includes the restricted awards — jumped from $14.8 million in 2020 to $98.7 million in 2022 and $99.4 million in 2022.
Apple said Cook supported the changes to his compensation and the company plans to position Cook’s annual target compensation between the 80th and 90th percentiles relative to its primary peer group for future years.
The company will hold its annual meeting March 10th. In midday trading, Apple shares edged down to $133. The stock has declined about 23% in the past year.