In a ruling on Wednesday, U.S. District Judge Jennifer Rochon dismissed a lawsuit against Apple (AAPL.O), which accused the tech giant of overpaying CEO Tim Cook and other top executives by tens of millions of dollars. The lawsuit alleged that Apple had miscalculated the value of performance-based stock awards, resulting in excessive compensation for its executives.
Judge Rochon, presiding over the case in Manhattan, stated that Apple had accurately described its pay methods in detailed compensation tables in its 2023 proxy statement, meeting the requirements of securities laws and U.S. Securities and Exchange Commission rules.
Furthermore, Rochon found no evidence of improper conduct by Apple’s board of directors in awarding executive pay. She noted that the plaintiff, a pension fund associated with the International Brotherhood of Teamsters, had not provided the board with sufficient time to address its objections before initiating legal action.
The lawsuit claimed that Apple had awarded Cook and four other executives $92.7 million and $94 million worth of performance-based restricted stock units in 2021 and 2022, respectively. However, the compensation committee had purportedly intended to allocate only $77.5 million each year.
The plaintiff attributed this alleged discrepancy to the committee’s incorrect calculation of the RSUs’ fair values at the time of the grants, which it argued misled shareholders participating in advisory votes on executive compensation, known as “say-on-pay.”
According to Apple’s proxy filings, Cook’s total compensation amounted to approximately $99 million in both 2021 and 2022, including over $82 million in stock awards annually. However, his total pay decreased to $63.2 million in 2023. The four other Apple executives received more than $26 million each year over the same period.
Lawyers representing the pension fund did not immediately respond to requests for comment following the judge’s decision.
The case was filed as International Brotherhood of Teamsters, Garage Employees Local 272 Labor Management Pension Fund v Apple Inc et al, in the U.S. District Court for the Southern District of New York, under case number 23-01867.