Topline
Apple announced Thursday it is lowering CEO Tim Cook’s annual compensation by more than 40% in 2023, after the billionaire recommended the dock in pay and analysts argued that his ballooning compensation package didn’t make sense for investors.
Apple CEO Tim Cook attends Apple’s “Ted Lasso” season two premiere at the Pacific Design Center on ... [+]
Key Facts
Apple said in a Securities and Exchange Commission filing that Cook’s compensation target for 2023 is $49 million, down from his $84 million target last year.
Cook actually earned $99.4 million in 2022 due to the price of Apple’s stock, which accounts for the lion’s share of his income.
The cut comes from an adjustment in Cook’s equity award, which will pay him an estimated $40 million in 2023 after last year’s award ended up paying him around $83 million (above the $75 million estimate coming into 2022), though the final value of the 2023 payment is contingent on the price of Apple shares.
Cook will again be paid a $6 million bonus on top of a $3 million base salary, which has remained the same since 2016.
Crucial Quote
“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,” Apple said in the filing.
Forbes Valuation
We estimate Cook to be worth $1.7 billion. He has pledged to give most of his wealth away to philanthropic causes.
Key Background
Cook has worked at Apple for decades and began serving as the company’s CEO in 2011, after cofounder Steve Jobs stepped down from the company’s helm. The company has grown significantly since then, and its market capitalization briefly topped $3 trillion a year ago, but Apple’s share price fell 27% over the course of 2022, which was a difficult year for tech stocks generally. Cook’s compensation package received pushback last year from the advisory firm Institutional Shareholder Services, which recommended Apple shareholders vote against it at a March meeting, citing “significant concerns regarding the design and magnitude.” Stockholders ended up approving the package, with 64.4% voting in support, though Cook later backed efforts to reel in his pay, which has risen rapidly in the past few years. Cook’s compensation package in 2020 was worth $14.8 million, a fraction of what he made either last year or in 2021, when he was paid $98.7 million.
Further Reading
Tim Cook's $800 Million Giving Pledge: Why It's So Important (Forbes)
Apple shareholders approve CEO Cook's annual compensation, civil rights proposal (Reuters)
