Ordinarily, news of a high-powered CEO copping a sizable pay cut on the chin would spell trouble for the company as a whole, but in the case of Tim Cook – who was more than happy to oblige with the headlining adjustment recently revealed via SEC filing – it’s quite the opposite.
In 2021, Cook made approximately US$99 million (AU$142.4 million): a little under US$83 million (AU$119.3 million) in stock awards, US$12 million (AU$17.3 million) in incentives, and US$3 million (AU$4.3 million) in base salary.
The chief executive also received benefits ranging from security, personal air travel, and over US$46,000 (AU$66,150) in vacation cash-out, to obligatory retirement plan contributions. For reference, that’s about 1,447 times the median salary of your average Apple employee.
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Naturally, this didn’t go unnoticed by Apple shareholders and the media alike. Nor did it bode particularly well with any of the aforementioned. Last year, top advisory firm Institutional Shareholder Services even urged investors to vote against Cook’s former pay package, resulting in the collective expressing their “preference for a higher percentage of Cook’s equity award to be performance-based” in 2023.
“Based on these important conversations, we have made changes to the size and structure of Tim’s 2023 compensation,” wrote Apple’s Compensation Committee, which is currently comprised of Art Levinson, Al Gore, and Andrea Jung.
The committee added: “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.”
According to CNBC, while further changes to the pay cut may be on the horizon, for the time being, Tim Cook is earning US$49 million (AU$70.5 million) annually – adding to his already-considerable US$1.7 billion (AU$2.4 billion) net worth – with 75% of his vesting shares tied to Apple’s stock performance instead of 50%.
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Not the worst thing in the world considering said stock (NASDAQ: AAPL) has returned +1,212% since Cook assumed the role of CEO back in 2011 versus the S&P500’s +290%. Translation: in terms of paper value, the man could very well still come out on top despite sacrificing major dollarydoos upfront.
