Apple CEO Tim Cook will take a 40 percent pay cut in 2023

Tim Cook is getting paid about 40 percent less than last year, according to the annual proxy statement (PDF) Apple has released — and the CEO himself recommended it. Apparently, during the tech giant’s 2022 annual shareholder advisory meeting, only 64 percent of the “Say on Pay” votes cast on the executive compensation proposals were in favor of retaining pay packages for 2021. While still a majority vote, it represents a significant decrease in approval from year to year. As 9to5Mac notes that 94.9 per cent of the shareholders who voted the previous year were in favor of the compensation proposals for managers.

To determine this year’s pay packages, Apple̵[ads1]7;s compensation committee took into account Say on Pay’s voting results and Tim Cook’s own recommendation “to adjust compensation in light of feedback received.” For 2023, Cook’s target salary is $49 million, down $35 million from his 2022 target salary. His base salary remains $3 million and his annual cash incentive remains unchanged at $6 million, but the value of the equity award went from $75 million in 2022 to 40 million dollars this year. Furthermore, he was awarded an equity award that is 75 percent performance and 25 percent time-based accrual, instead of 50-50 as in 2022.

The truth is that Cook, who pledged to donate his fortune to charity a few years ago, is likely to earn more than $49 million this year due to stock awards and bonuses. In accordance Bloomberghe earned $99.4 million in 2022, which was $15.4 million more than his target salary for the year. In 2021, his total salary package was $98.7 million. Critics such as advisory firm Institutional Shareholder Services previously urged shareholders to vote against Cook’s pay package, citing concerns about the size and structure of his equity award. “Half the price is missing performance criteria,” the firm previously said. This change in Cook’s compensation reflects the changing attitude towards executive pay, and the CEO can set an example for his peers. After all, it is unusual for a manager at his level to recommend that their own salary be cut.