Apple CEO, Tim Cookhis salary is expected to be cut by almost 50% this year to around $49m (£40m) after the billionaire boss asked the company to “adjust his compensation” in light of feedback from shareholders frustrated by the decline of the company’s share price.
Cook, 62, who became CEO after co-founder Steve Jobs stepped down before his death in 2011, was paid $99.4 million in 2022 and $98.8 million in 2021. But says 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 exceptional performance, and the recommendation that Mr. Cook adjust his compensation in light of the feedback received.” An apple the documentation says.
Cook’s annual base salary and bonus will remain unchanged at $3 million and $6 million, respectively. But the “target” amount he will be given in stock-based bonuses will drop from $75 million last year to $40 million next year.
The amount given as stock bonuses will also be more dependent on the performance of Apple’s stock price 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 fell 23% over the past 12 months to close at $133.41 on Thursday, raising concerns among some shareholders.
The company said 64% of shareholders supported its pay plans at its annual meeting last year, but admitted there had been a “noticeable decline compared to the previous year as our annual ‘say on pay’ proposals received much more -high levels of shareholder support over many years”.
Shareholder consultancy Institutional Shareholder Services last year urged investors to vote against Cook’s pay package, saying there were “significant concerns” about the “design and scale” of the package. ISS indicated that Cook was paid 1,447 times more than the average Apple employee.
Apple said it reached out to investors to hear their concerns. “Those shareholders we spoke with who 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 a major reason for 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 Cook for 2023 and reduced its target capital value of the grant,” he adds.
Cook’s total salary of $99.4 million last year included $630,600 in personal security expenses and $712,500 for the use of a private jet. His 2022 salary was slightly higher than the $98.8 million collected in 2021, but that was more than 570% higher than the $14.7 million he was paid in 2020.
Cook, who has a personal fortune of more than $1 billion according to the Bloomberg Billionaires Index, said that plans to give away his entire fortune before he dies. In 2015, he told Fortune magazine that he planned to donate his entire fortune to charity after providing for the education of his then 10-year-old nephew.
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