Apple’s CEO, Tim Cook, is set to receive a substantial pay cut in 2023. The company’s top executive will receive $49 million in compensation this year.
For comparison, Cook’s compensation for 2022 was $99.4 million in 2022 and $98.7 million in 2021.
Tim Cook himself requested a pay cut
Cook requested the change himself, a rare move from a CEO, followed by shareholder recommendations. A shareholder advisory group urged Apple investors to fight against Tim Cook’s steep $99 million payout in 2021. The CEO’s yearly payout is linked to Apple’s performance compared to the S&P500, and he is majorly paid through RSUs (Restricted Stock Units).
Until last year, the executive’s annual compensation consisted of 50% RSUs. This will increase to 75% for 2023 and the following years. His salary of $3 million and cash incentive of $6 million remain unchanged for 2023.
In 2022, Tim Cook’s $99.4 million compensation comprised $83 million in stock awards, $12 million in incentives, and $3 million in salary. This was on top of other benefits like security, flight travels, and vacation payout. Apple’s top executive eventually plans to donate most of his fortune.
Apple shareholders are happy with Cook’s leadership
Despite a massive pay cut, Apple’s board is more than pleased with the CEO’s performance. Apple’s performance under Tim Cook’s leadership was exceptional in 2022 in the face of supply-chain headwinds and COVID-19 outbreaks. The shareholders also have faith in his long-term strategic decisions for the company.
The Compensation Committee wants to set Cook’s “annual target compensation between the 80th and 90th percentiles relative to our primary peer group for future years.” The CEO’s $49 million 2023 annual package includes $3 million in salary, a $6 million bonus, and an equity award value of $40 million. For comparison, Cook received $75 million in equity in 2022.
Additionally, Cook will receive fewer RSUs if he retires before 2026. He has been Apple’s CEO since 2011, and under his leadership, the company’s share has delivered a return of over 1,400%.