Tim Cook, CEO of Apple Inc., speaks at the “First Tool-In” ceremony at TSMC’s under construction facility in Phoenix, Arizona, Tuesday, December 6, 2022.
Caitlin O’Hara | Bloomberg | Getty Images
Apple CEO Tim Cook will receive a pay cut in 2023 to $49 million in total compensation, the company said in a filing with the SEC.
Cook demanded the change, Apple said in the filing, after shareholders voted on its compensation package. The company also reduced the number of restricted storage units that Cook would receive if he retired before 2026.
In 2022, Cook earned nearly $83 million in stock awards, $12 million in incentives, and $3 million in salary. He also received benefits including retirement insurance premiums, security, personal air travel, and more than $46,000 for vacations.
Apple’s compensation committee said it made the change in response to last year’s vote in which 64% of shareholders approved Cook’s compensation, up from 95% who approved it in Apple’s fiscal year 2020.
Despite this, Apple’s management praised Cook’s performance and said it had confidence in the CEO’s long-term strategic decisions.
Executive compensation has recently come under increasing pressure from institutional shareholders. Institutional Shareholder Services advised Apple shareholders to vote against Cook’s compensation package at last year’s annual meeting.
The compensation committee, which included Art Levinson, Al Gore and Andrea Jung, said it had contacted institutional shareholders to assess how they felt about Cook’s compensation.
“Based on these important discussions, we have made changes to the size and structure of Tim’s compensation for 2023,” the committee wrote.
More changes may be in the store.
“Given Apple’s comparable size, reach and performance, the Compensation Committee also intends to place Mr. Cook’s annual salary target between the 80th and 90th percentiles of our main peer group for years to come,” the committee said.
Cook is mainly paid in limited SKUs. The actual number of Apple shares Cook vests depends on Apple’s performance against the S&P 500. Apple shares have performed well enough that Cook typically vests up to the maximum amount.
Since Cook took over as CEO in 2011, Apple shares have gained 1,212% compared to 290% for the S&P 500, Apple said.
In addition to reducing the overall target, 75% of Cook’s shares acquired will be tied to Apple’s 2023 share performance, instead of 50%.
Apple announced a stock grant for Cook in September 2020 until 2025. Cook received it on the first day of Apple’s 2021 fiscal year, which began in late September. Once approved, Cook’s stock grant would have given him 1 million shares worth about $114 million at the time if Apple had met all of its goals.
Cook’s previous 2011 grant was worth over $900 million at Apple’s September 2020 stock price.
Cook said in 2015 that he plans to donate his fortune to charity.
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