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 requested the change, Apple said in the filing, following a shareholder vote on his pay package. The company also reduced the number of restricted stock units Cook would receive if he retires before 2026.
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In 2022, Cook made just under $83 million in stock awards, $12 million in incentives, and $3 million in salary. He also got benefits including retirement plan contributions, security, personal air travel, and over $46,000 in vacation cash-out.
Apple’s compensation committee said that it made the change in response to last year’s say-on-pay vote, in which 64% of shareholders approved of Cook’s compensation, down from 95% that approved it for Apple’s 2020 fiscal year.
Still, Apple’s board praised Cook’s performance, and said it has confidence in the CEO’s long-term strategic decisions.
Executive compensation has come under increasing pressure from institutional shareholders of late. Institutional Shareholder Services recommended that Apple shareholders vote against Cook’s pay package at last year’s annual meeting.
The compensation committee, comprised of Art Levinson, Al Gore, and Andrea Jung, said it reached out to institutional shareholders to gauge how they felt about Cook’s pay.
“Based on these important conversations, we have made changes to the size and structure of Tim’s 2023 compensation,” the committee wrote.
More alterations could be in store.
“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,” the committee said.
Cook is paid mostly in restricted stock units. The number of actual shares of Apple stock that Cook vests depends on Apple’s performance versus the S&P 500. Apple’s stock has done well enough that Cook typically vests the maximum amount.
Since Cook took over as CEO in 2011, Apple stock has returned 1,212% versus 290% for the S&P 500, Apple said.
In addition to reducing the total target, 75% of Cook’s vesting shares will be tied to Apple’s stock performance in 2023, instead of 50%.
Apple announced a stock grant for Cook in September 2020 running through 2025. Cook received it on the first day of Apple’s fiscal 2021, which started at the end of September. When it was approved, Cook’s stock grant would have given him 1 million shares worth about $114 million at the time if Apple were to hit all its targets.
Cook’s previous stock grant from 2011 ended up being worth more than $900 million at Apple’s September 2020 share price.
Cook said in 2015 that he plans to donate his fortune to charity.