- Apple CEO Tim Cook will take a 40% pay cut in 2023, lowering his compensation to $49 million, down from $84 million last year.
- Both numbers are compensation targets and Cook’s 2022 pay totaled $99 million.
- Cook’s equity awards will be reduced from $75 million to $40 million and will be more closely tied to stock performance.
- Apple stock has appreciated over 1,200% since Cook became CEO in August 2011, far outpacing the S&P 500’s 290% return over this period.
- The decision to reduce Cook’s came in response to pressure by institutional shareholders, after just 64% of shareholders approved of Cook’s 2022 compensation package.
Cook’s target compensation for 2023, as set by shareholders, will total $49 million. Cook’s actual compensation for the year will likely be higher as his total compensation for 2022 was $99 million, nearly 18% higher than his target of $84 million. That $99 million was composed of $3 million in salary, $83 million in stock awards, $12 million in cash incentives, and over $1 million in other compensation.
The decision was made after last year’s shareholder vote, in which just 64% of Apple shareholders voted to approve Cook’s compensation package, significantly less than the 95% who approved it in fiscal year 2020.
The significantly closer vote came amid pressure by Apple’s institutional shareholders and compensation committee to revise Cook’s compensation. The committee reached out to shareholders to gauge how they felt about Cook’s compensation. The committee implemented the changes partly in response to the conversations they had with stockholders.
The change in Cook’s compensation package will apply solely to his stock awards, which in recent years have made up more than half of his total pay as Apple’s stock price and market cap have surged. In the 2023 fiscal year, Cook will earn $40 million in equity awards, down from $75 million in 2022. The equity award mix, which allocates compensation based on stock performance and time, will be allocated 75-25 in favor of performance, after being split evenly in 2022.
Since Cook took the helm as CEO in August of 2011, after the passing of Apple founder and then-CEO Steve Jobs, Apple shares (AAPL) have appreciated 1,212% after including dividends, compared to a 290% return for the S&P 500.
Apple shares are relatively unchanged in Friday trading. They are up nearly 7% since the beginning of the year.