Apple Chief Executive Officer Tim Cook will receive a substantial pay cut, as he requests on adjusting his pay. As per the filing, Cook targets a compensation of $49 million, which is 40% lower than his target compensation in 2022.
CUPERTINO, CALIFORNIA - SEPTEMBER 07: Apple CEO Tim Cook walks through a crowd during an Apple special event on September 07, 2022 in Cupertino, California. Apple CEO Tim Cook unveiled the new iPhone 14 as well as new versions of the Apple Watch, including the Apple Watch SE, a low-cost version of the popular timepiece that will start at $249.by Justin Sullivan/Getty Images
(Photo : Justin Sullivan/Getty Images) CUPERTINO, CALIFORNIA - SEPTEMBER 07: Apple CEO Tim Cook walks through a crowd during an Apple special event on September 07, 2022 in Cupertino, California. Apple CEO Tim Cook unveiled the new iPhone 14 as well as new versions of the Apple Watch, including the Apple Watch SE, a low-cost version of the popular timepiece that will start at $249.
Adjusting CEO's Compensation
Apple will be adjusting its Chief Executive Officer compensation this year. Based on a report from MacRumors, Tim Cook targets a compensation of $49 million and the pay cuts was decided and requested by the CEO himself.
Several adjustments have been made aside from the pay cuts. Cook's percentage of stock units that will be awarded to him and tied to Apple's performance will increase to 75% this year from 50% in the past years.
The filing states that this decision was based on three factors; balanced shareholder feedback, exceptional performance, and recommendation from the CEO. This made Apple's board praise Cook and his confidence in long-term strategic decisions.
"Apple also plans to position Mr. Cook's annual target compensation between the 80th and 90th percentiles relative to our primary peer group for future years," the company added.
Previous Compensation
Compared to his target compensation last year, this is much lower for 40%, as the previous costs $99.4 million. Aside from the pay, this includes a $4 million salary, roughly $83 million in stock awards, and $13.4 million in other forms of pay. Meanwhile, his compensation for 2021 was $98.7 million.
While the compensation will be adjusted, the salary, bonus, and equity award will remain its numbers for this year. However, CNBC reported that there are still no specific numbers for this matter, as the actual total compensation for 2023 will be based on the company's performance in stocks.
The compensation committee that includes Art Levinson, Al Gore, and Andrea Jung said that they asked the institutional shareholders regarding this decision and what they felt about Cook's pay.
The committee stated, "taking into consideration Apple's comparative size, scope, and performance, the Compensation Committee also intends to position Mr. Cook's annual target compensation between the 80th and 90th percentiles relative to our primary peer group for future years."
Since the CEO took over the company in 2011, he was very vocal about pledging to give away his wealth to charitable causes.
Criticisms
The company received several criticisms from groups like Institutional Shareholder Services regarding the CEO's previous compensation. As per Bloomberg, ISS is a top advisory firm that complained their concerns regarding Cook's stock that could potentially continue to vest after his retirement.
Adding to this is that the rewards mostly did not depend on the performance criteria. Despite this, the majority of shareholders approved this decision.
