Apple CEO Tim Cook is taking a 40 percent pay cut in 2023

Cook himself recommended an adjustment in compensation 'in light of feedback received.'

REUTERS/Andrew Kelly

Tim Cook is getting paid around 40 percent lower than last year, according to the annual proxy statement (PDF) Apple has released — and the CEO himself recommended it. Apparently, during the tech giant's annual advisory meeting for shareholders in 2022, only 64 percent of the "Say on Pay" votes cast regarding the compensation proposals for executives was in favor of retaining their 2021 pay packages. While that's still majority of the votes, it represents a significant year-over-year decline in approval. As 9to5Mac notes, 94.9 percent of the shareholders who voted the previous year was in favor of the compensation proposals for executives.

To decide this year's pay packages, Apple's Compensation Committee took into account the Say on Pay's voting results and Tim Cook's own recommendation "to adjust his compensation in light of feedback received." For 2023, Cook's target salary is $49 million, down $35 million from his target salary in 2022. His base pay is still $3 million and his annual cash incentive remains unchanged at $6 million, but his equity award value went from $75 million in 2022 to $40 million this year. Further, he was granted an equity award that's 75 percent performance and 25 percent time-based vesting, instead of 50-50 like 2022's.

The truth is that Cook, who vowed to donate his fortune to charity a few years ago, will likely earn more than $49 million this year due to stock awards and bonuses. According to Bloomberg, he earned $99.4 million in 2022, which was $15.4 million more than his target salary for the year. In 2021, his total pay package was $98.7 million. Critics like advisory firm Institutional Shareholder Services previously urged shareholders to vote against Cook's pay package, citing concerns about how big his equity award is and how it's structured. "Half of the award lacks performance criteria," the firm previously said. This shift in Cook's compensation reflects the changing attitude towards executive pay, and the CEO might be setting an example for his peers. It is, after all, uncommon for an executive his level to recommend that their own pay be cut.