Apple CEO Tim Cook has recommended a reduction in his pay for this year after shareholders rebelled. The company announced that Cook’s target pay package for 2022 will be reduced to $49 million, which is 40% lower than his target pay for 2022 and about half of the $99.4 million total compensation that he received last year.
The majority of Cook’s 2022 compensation, around 75%, was tied to company shares, with half of that dependent on the share price performance. However, shareholders voted against Cook’s pay package after Apple’s stock fell by nearly 27% last year. Although the vote is non-binding, the board’s compensation committee stated that Cook had requested the reduction.
The executive’s share award target has been cut to $40 million, with 75% of that linked to share price performance. Cook’s base salary of $3 million and a $6 million bonus will remain unchanged. The board believes that Cook’s new pay package is responsive to shareholder feedback while also aligning pay with performance and recognizing Cook’s outstanding leadership.
Despite the reduction in pay, Cook is estimated to have a personal wealth of $1.7 billion, according to Forbes.In addition to the pay reduction, Apple also announced that it will tie executive compensation to environmental, social, and governance (ESG) performance. This means that a portion of executive pay will be based on the company’s progress in meeting specific ESG goals and targets set by the company.
Apple’s annual proxy statement highlighted the company’s commitment to achieving net-zero carbon emissions across its entire business, including its entire supply chain, by 2030. The company also plans to continue its efforts to promote diversity, equity, and inclusion in the workplace, and to protect the rights of workers in its supply chain.
This move to tie executive pay to ESG performance aligns with a growing trend among companies to link compensation to broader societal and environmental goals, and to be more transparent about their performance in these areas.