Tim Cook is set to receive a huge slash in his salary after Apple revealed in a SEC filing that they would be reducing the annual salary of the CEO. The chief executive officer will take a pay cut in 2023 to $49 million in total compensation, according to company documents submitted to SEC.
In a vote that happened last year, the company personality will receive about $49 million in compensation. From the information contained in the filing, Tim Cook was the one who requested the change in his salary structure after the shareholders voted on the amount of money he received as salary. Together with the reduction in his salary, the Apple stock Tim Cook will receive if he retires before 2025 will also be reduced.
In 2022, several data revealed that Tim Cooks earned about $3 million in salary, $12 million in incentives, and under $82 million in stock awards. Another benefit Tim Cook's salary per month package earned him was a vacation payout of up to $46,000. He was also given bonuses for his security, personal aid travel, and retirement plan contributions.
The percentage of Apple’s compensation committee who voted for the compensation of Tim Cook is currently down from what was witnessed in 2020. About 95% of Apple’s compensation committee voted for Tim Cook's salary per month to be slashed and allow him to be compensated. Despite the slash in his salary, Apple has expressed the decision to continue under the leadership of their CEO, saying his strategies have been paying off for the company.
Institutional Shareholder Services had recommended that Apple shareholders reduce the amount of salary Tim Cook received at the end of the month. The compensation committee, composed of Art Levinson, Al Gore, and Andrea Jung, were the people who came together to make the final decision about the pay cut.
In an official statement, Apple’s compensation committee said, "Based on these important conversations, we have made changes to the size and structure of Tim’s 2023 compensation."
More Pay Cuts Expected in the Future
Apple’s compensation committee has just revealed that they plan on reducing the salary of Tim Cook further in the future depending on the economic situation and other factors. Apple’s compensation committee said, "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."
Tim Cook receives most of his salary as restricted Apple stocks, and the amount of stocks he receives depends on the company’s performance versus the S&P 500. In 2020, the company announced it would award Tim Cook a new stock grant until 2025.
In a statement, Apple's board of directors made a decision open to the public, saying, "Tim has brought unparalleled innovation and focus to his role as CEO and demonstrated what it means to lead with values and integrity. For the first time in nearly a decade, we are awarding Tim a new stock grant that will vest over time in recognition of his outstanding leadership and with great optimism for Apple’s future as he carries these efforts forward."