Mehul Reuben DasJan 13, 2023 13:47:32 IST
Tim Cook will take a substantial pay reduction in 2023 after he urged that his remuneration be changed in response to feedback and criticism from Apple’s stakeholders. Apple today published its annual proxy statement for investors, revealing a number of details about executive compensation, shareholder proposals, and more.
Even though Tim Cook is voluntarily taking a massive pay cut for 2023, there are several other benefits that he still gets to enjoy. For example, he will continue to have a private jet at his beck and call for all business and personal travel.
The report that was released alongside the statement revealed that Tim Cook will have a “target compensation of $49 million” in 2023, a decline of around 47 per cent compared to what he earned in 2022.
Cook’s 2023 target total compensation has been set $49 million, which is a reduction of more than 45 per cent from his 2022 target total compensation. Taking into consideration Apple’s comparative size, scope, and performance, the Compensation Committee also intends to position Cook’s annual target compensation between the 80th and 90th percentiles relative to our primary peer group for future years.
The Compensation Committee of Apple’s board of directors is in charge of matters like executive compensation. According to today’s filing, Cook himself recommended that his compensation structure be adjusted based on feedback received as part of the Compensation Committee’s “Say on Pay” survey and vote.
Prior to the start of each fiscal year, the Compensation Committee assesses and decides on compensation. The results of the 2022 Say on Pay advisory vote led to broader shareholder engagement on executive compensation in 2022 of approximately 53% of institutional shares held. Apple’s outstanding performance, shareholder comments, and Cook’s suggestion that his remuneration be adjusted in light of the feedback received were all taken into account by the Compensation Committee.
In 2021, Tim Cook received total compensation of around $98 million. Sixty-four percent of votes cast at the next year’s shareholders meeting were in favor of the 2021 compensation paid to executives.
Cook’s target compensation for 2022 was $84 million, but he actually earned roughly $99.4 million since a large portion of his income is performance-based and linked to Apple’s stock.
For 2023, Cook will receive a base salary of $3 million and an annual case incentive of $6 million. There are no changes made to these figures. However, as we said, a majority of Cook’s remuneration is tied to Apple’s stock. For 2023, his equity award value has been capped at $40 million. This is down from the $75 million he made in 2022.
Cook stated in a 2015 interview that he intends to use a “systematic approach” to donating in order to distribute all of his fortune. He did not provide specifics at the time, just stating that he had begun giving money “quietly.”
Besides this annual compensation, one major benefit that Cook enjoys is the availability of a private jet for all business and personal travel. For “security and efficiency considerations,” the Apple board of directors adopted a policy in 2017 requiring Cook to fly privately for all of his professional and personal trips.
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