Apple chief executive Tim Cook is expected to see his salary cut by nearly 50% this year to around $49m (£40m) after the billionaire boss asked the company to “adjust his compensation in light of comments from disappointed shareholders. due to the fall in the price of the company’s shares.
Cook, 62, who became chief executive 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 the the company said in a regulatory filing late Thursday night that he had set a “target compensation” of $49 million by 2023.
“The compensation committee balanced shareholder feedback, Apple’s exceptional performance, and a recommendation from Mr. Cook to adjust his compensation in light of the 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 he will receive in stock-based bonuses will drop from $75 million last year to $40 million next year.
The amount awarded in stock bonuses will also depend more on Apple’s stock price performance than last year. Now, 75% of the stock bonus depends on the performance of Apple’s stock market, 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 pay plans at its annual meeting last year, but acknowledged there had been a “notable decline year-over-year as our annual ‘say on pay’ proposals 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 pay package, saying there were “significant concerns” about the “design and scale” of the package. ISS noted that Cook was paid 1,447 times more than the average Apple employee.
Apple said it had reached out to investors to hear their concerns. “Those shareholders we spoke to who did not support our 2022 ‘say on pay’ proposal consistently cited the size and structure of the 2021 and 2022 stock awards awarded to Mr. Cook as the primary reason for their decision to vote,” the company said.
“Balancing shareholder feedback, a desire to continue to create meaningful performance and retention incentives, and Mr. Cook’s support for changes to his compensation to reflect feedback received, the compensation committee maintained the cash components of Mr. Cook’s compensation for 2023 and lowered his target capital award grant value,” it added.
Cook’s total payment of $99.4 million last year included $630,600 in personal security costs and $712,500 in use of private jets. Her 2022 salary was slightly higher than the $98.8 million raised in 2021, but was more than 570% higher than the $14.7 million she earned in 2020.
Cook, who has a personal fortune of more than $1 billion, according to the Bloomberg Billionaires Index, has said he plans to give away his entire fortune before he dies. In 2015, he told Fortune magazine that he planned to donate all of his wealth to charity after helping his 10-year-old nephew’s education.
