Apple CEO Tim Cook’s total income will drop to $49 million in 2023, according to the company’s filing with the U.S. Securities and Exchange Commission.
Cook himself requested the change following a shareholder vote on his pay package. The company also reduced the amount of restricted stock that Cook will receive if he retires before 2026.
In 2022, Tim Cook earned just under $83 million in stock, $12 million in incentives and $3 million in salary. He also received benefits, including contributions to a retirement plan, security, personal airfare and more than $46,000 in vacation time.
Apple’s compensation committee said it made the change in response to last year’s pay vote, in which 64% of shareholders approved Cook’s payments (95% of shareholders approved them in 2020).
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At the same time, Apple’s board praised Cook’s work and said it was confident in the CEO’s long-term strategic decisions.
Executive pay has recently come under increasing pressure from institutional shareholders. Institutional Shareholder Support recommended that Apple shareholders vote against Cook’s pay package at last year’s annual meeting.
The compensation committee, which consists of Art Levinson, Al Gore and Andrea Jung, said it reached out to institutional shareholders to gauge how they felt about Cook’s pay.
“Based on these important conversations, we have made changes to the amount and structure of Tim’s compensation in 2023. “Given Apple’s comparative size, scope and performance, the compensation committee also intends to place Mr. Cook’s annual target compensation between the 80th and 90th percentile relative to our core group of competitors for future years,” the committee said in a statement. .
Tim Cook receives the main reward in restricted shares of the company (restricted stock units, RSU). These are shares that cannot be fully transferred by the company to the recipient until certain conditions or restrictions are met. Once these conditions are met, the shares are no longer restricted and may be transferred to the person receiving the award. RSUs are often used as a form of rewarding employees with the condition of continuing to work for a certain period of time, achieving certain milestones in product development or company development.
The actual number of Apple shares that Cook receives depends on the company’s performance compared to the overall S&P 500 stock index. Apple’s stock usually performs quite well, so its chairman usually receives the maximum amount. According to Apple, since Cook took over as CEO in 2011, Apple shares have returned 1,212%, versus 290% for the S&P 500.
In addition to the number reduction, 75% of the shares given to Cook will be tied to Apple’s stock returns in 2023 – not 50% as previously.
Apple announced the granting of shares to Tim Cook in September 2020 until 2025. Cook received it on the first day of Apple’s 2021 fiscal year, which began in late September. When it was approved, Cook’s grant would have given him 1 million shares worth about $114 million if Apple had met all of its goals. Cook’s previous stock grant from 2011 resulted in more than $900 million at Apple’s September 2020 share price. In 2015, the head of Apple announced that he plans to donate his fortune to charity.
Tim Cook will receive $750 million in Apple shares – this is the last payment under a 10-year contract
Source: CNBC
