The Apple chief executive, Tim Cook, is expected to have his pay cut by almost 50% this year to about $49m (£40m) after the billionaire boss asked the company to “adjust his compensation” in the light of feedback from shareholders disappointed at the fall in the company’s share price.
Cook, 62, who became CEO after the co-founder Steve Jobs stepped down before his death in 2011, was paid $99.4m in 2022 and $98.8m in 2021. But the company said in a regulatory filing late on Thursday night that it had set a “target compensation” of $49m for 2023.
“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,” Apple said in the filing.
Cook’s annual base salary and bonus will remain unchanged at $3m and $6m respectively. But the “targeted” amount he will be given in share-based bonuses will fall from $75m last year to $40m this coming year.
The amount given in share bonuses will also be more dependent on Apple’s share price performance than it was last year. Now 75% of the share bonus is dependent on Apple’s stock market performance, up from 50% last year.
Apple’s shares have fallen by 23% over the past 12 months to $133.41 at the close on Thursday, raising concerns among some shareholders.
The company said 64% of shareholders backed its pay plans at its annual meeting last year but acknowledged that there had been a “notable year-over-year decline, as our annual ‘say on pay’ proposals have received much higher levels of shareholder support for many years”.
The shareholder advisory service Institutional Shareholder Services last year urged investors to vote against Cook’s pay package, saying there were “significant concerns” over the “design and magnitude” of the package. ISS pointed out that Cook was paid 1,447 times more than the average Apple employee.
Apple said it had reached out to investors to hear their concerns. “Those shareholders we spoke with that did not support our 2022 ‘say on pay’ proposal consistently cited the size and structure of the 2021 and 2022 equity awards granted to Mr Cook as the primary reason for their voting decision,” the company said.
“Balancing shareholder feedback, a desire to continue to create meaningful performance and retention incentives, and Mr. Cook’s support for changes to his compensation to reflect the feedback received, the compensation committee maintained the cash components of Mr Cook’s 2023 compensation and reduced his target equity award grant value,” it added.
Cook’s total $99.4m pay last year included $630,600 in personal security costs and $712,500 of private jet usage. His 2022 pay was slightly higher than the $98.8m collected in 2021 but that was more than 570% higher than the $14.7m he was paid in 2020.
Cook, who is sitting on a personal fortune of more than $1bn, according to the Bloomberg Billionaires Index, has said he plans to give away all of his fortune before he dies. In 2015 he told Fortune magazine that he planned to donate all of his wealth to charity after providing for his then 10-year-old nephew’s education.