40% pay cut: Why CEO Tim Cook recommended Apple deduct his salary

During a 'say-on-pay' vote, only 64 per cent of shareholders approved the compensation for executives — a big dip from the 95 per cent rating for the 2020 fiscal year

By Web Desk

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AFP file
AFP file

Published: Fri 13 Jan 2023, 11:46 AM

Last updated: Fri 13 Jan 2023, 8:02 PM

Apple CEO Tim Cook has recommended a major reduction in his own salary, the company stated in its latest filing with the US Securities and Exchange Commission (SEC).

This year, Cook will be getting a 40 per cent cut from his 2022 target compensation.

The iPhone-maker has a dedicated compensation committee, which makes decisions at the start of every fiscal year.

Explaining the basis of the salary changes for its executives, the tech giant said: "The results of the 2022 Say-on-Pay advisory vote led to broader shareholder engagement on executive compensation in 2022 of approximately 53 per cent of institutional shares held. The compensation committee balanced shareholder feedback, Apple’s exceptional performance, and a recommendation from Mr. Cook to adjust his compensation in light of the feedback received."

Cook received a total pay of $99.4 million (Dh365 million) in 2022, which included a $3-million (Dh11.02 million) salary, $83 million (Dh305 million) in stock awards, and a bonus, according to reports.

With the reduction, the Apple CEO is set to receive a total compensation of $49 million (nearly Dh180 million) this year. Seventy-five per cent of Cook's shares will also be tied to Apple's stock performance this year, up from 50 per cent.

Cook's salary adjustment recommendation was largely based on shareholder sentiment. At the 'Say-on-Pay' vote during the 2022 meeting, only 64 per cent approved the compensation for executives — a big dip from the 95 per cent approval rate for the 2020 fiscal year.

"As a result, following the 2022 Annual Meeting, we expanded our shareholder outreach efforts and conducted a more targeted engagement aimed at better understanding specific shareholder concerns," the company said.

"Taking into consideration Apple’s comparative size, scope, and performance, the 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," it also said in the SEC filing.


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