Apple has chosen to reduce Chief Executive Officer Tim Cook’s salary by more than 40% this year, to $49 million. The tech titan cited investor recommendations as well as Cook’s desire to alter his remuneration. The $49 million compensation package includes the same $3 million basic salary and $6 million incentive as in 2022, as well as a $40 million equity award, compared to $75 million in 2022.
Tim Cook proposed the reduction in response to shareholder pressure. Last year, the iPhone maker’s stock plummeted due to supply chain concerns and a global economic slump. Cook’s annual base compensation will stay at $3 million, with a bonus of up to $6 million. The most significant change in his salary package is how he will be allocated shares in the company.
However, Apple’s board applauded Cook’s achievements and expressed confidence in the CEO’s long-term strategic plans. Apple stock has returned 1,212% since Cook took over as CEO in 2011, compared to 290% for the S&P 500, according to Apple. Institutional shareholders have recently increased their pressure on executive compensation. At Apple’s annual meeting last year, Institutional Shareholder Services advised shareholders to vote against Cook’s financial compensation. The compensation committee, which included Art Levinson, Al Gore, and Andrea Jung, stated that it contacted institutional shareholders to evaluate their feelings regarding Cook’s salary.
Apple’s stock has lately dropped because of persistent production difficulties in China. These issues have been caused by COVID-19 restrictions and lockdowns, as well as a staffing deficit following the country’s recent spike in COVID-19 cases. Furthermore, global investors are apprehensive about the possibility of interest rate hikes, an economic slowdown, and the ongoing conflict in Ukraine.
In 2022, Apple granted Cook $75 million in stock options, half of which were dependent on Apple’s stock performance. His stock award objective for this year has been reduced to $40 million, with three-quarters of it contingent on share performance. Cook’s compensation target for 2022 was $84 million, while his actual total pay for last year was $99.4 million. This included $630,600 for personal security and $712,500 for the use of a private jet.