According to a filing with the SEC, Apple has announced that its CEO, Tim Cook, will have his compensation reduced to $49 million in 2023. The filing also states that Cook requested the decrease in pay, following a vote by shareholders on his compensation package. Additionally, the company has also decreased the amount of restricted stock units Cook would receive if he were to retire before 2026.
What is the background of Tim Cook’s pay decision?
According to Apple’s compensation committee, CEO Tim Cook’s compensation for 2022 will be reduced to $49 million. This comes in response to a say-on-pay vote held last year, in which 64% of shareholders approved of Cook’s compensation package, a decrease from the 95% who approved it in the 2020 fiscal year.
In 2022, Cook received nearly $83 million in stock awards, $12 million in incentives, and $3 million in salary. He also received benefits such as contributions to a retirement plan, security, personal air travel, and over $46,000 for vacation cash-out.
Apple pay committee’s remark on Tim Cook
Although the reduction in Tim Cook’s compensation package, Apple’s board of directors continues to express their confidence in the CEO’s performance and long-term strategic decisions. Executive compensation has been facing increased scrutiny by institutional shareholders in recent times, last year Institutional Shareholder Services (ISS) recommended Apple shareholders to vote against Cook’s pay package.
The compensation committee, consisting of Art Levinson, Al Gore, and Andrea Jung, stated that they reached out to institutional shareholders to gain insight on their views on Cook’s pay.
The compensation committee has stated that changes have been made to Tim Cook’s 2023 compensation package based on the feedback they received from institutional shareholders. They also indicated that additional changes may be implemented in the future.
The committee added that they intend to position Cook’s annual target compensation between the 80th and 90th percentiles relative to the primary peer group, taking into account Apple’s size, scope and performance. Cook’s compensation mostly comes in the form of restricted stock units, and the number of shares he receives depends on the performance of Apple’s stock relative to the S&P 500. Apple’s stock performance has been strong, which has resulted in Cook typically receiving the maximum amount of vested shares.
Journey of Tim Cook in Apple
Apple announced that since Tim Cook took over as CEO in 2011, the company’s stock has returned 1,212% compared to 290% for the S&P 500. In addition to reducing the overall target, 75% of Cook’s vesting shares will be linked to Apple’s stock performance in 2023, an increase from 50%.
In September 2020, Cook received a stock grant which runs through 2025, and this grant would have given him 1 million shares worth about $114 million at the time, if all targets were met. Cook’s previous stock grant from 2011 ended up being worth over $900 million at Apple’s September 2020 share price. Cook previously stated in 2015 that he plans to donate his fortune to charity.
In 2021, Apple CEO Tim Cook earned a salary of $15 million, according to a filing with the Securities and Exchange Commission. This figure includes a base salary of $3 million, as well as $12 million in performance-based cash incentives.
Cook’s salary has remained relatively consistent in recent years, with small fluctuations based on company performance. In 2020, he earned a total of $14.7 million, while in 2019, he earned $15.7 million.
It’s worth noting that Cook’s salary is significantly lower than that of many other top CEOs in the tech industry. For example, in 2020, the CEO of Facebook, Mark Zuckerberg, earned a salary of $23.4 million, and the CEO of Google, Sundar Pichai, earned a salary of $1.9 million.
Despite Cook’s relatively low salary, he has been able to accumulate a significant amount of wealth through his tenure as CEO. According to Forbes, Cook’s net worth is currently estimated to be around $700 million, thanks in part to his large stake in Apple.
Cook’s tenure as CEO has also been marked by significant growth for the company. Under his leadership, Apple’s market capitalization has grown from $357 billion in 2011 to over $2 trillion in 2021. The company has also consistently been one of the top performers in the stock market, with its stock price increasing by over 600% since Cook took over as CEO.
In conclusion, while Tim Cook’s salary may be lower than some other top CEOs in the tech industry, he has still been able to accumulate significant wealth through his tenure as CEO of Apple. Additionally, under his leadership, the company has seen tremendous growth, both in terms of market capitalization and stock price.
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