Apple CEO Tim Cook is taking a pay cut, but still stands to make a lot of money as the Big Tech giant rides a wave of success from the worldwide popularity of the iPhone and its other digital products. File Photo by John Angelillo/UPI | License Photo
Jan. 13 (UPI) -- Apple CEO Tim Cook has agreed to accept a 40% pay cut this year after investors turned sour on his annual compensation package that reached nearly $100 million in 2022.
Cook still stands to make a lot of money in incentives as the Big Tech giant rides a wave of success from the worldwide popularity of the iPhone and its other digital products.
A December vote revealed shareholders had grown increasingly dissatisfied with Cook's pay, which led the billionaire to request a lower salary in recent weeks.
Under the revised pay structure, Cook will make $49 million in 2023, down from $84 million the previous year, according to a filing with the Securities and Exchange Commission.
Apple's chief executive, who took over for Steve Jobs in 2011, earned a total of $99.4 million in 2022, mostly from incentives made off the resilience of the company's stock -- which is the major factor used to determine Cook's pay.
Cook's 2022 salary was calculated to be 1,177 times higher than the average Apple employee salary of $84,493.
Moving forward, 75% of Cook's vesting shares will be linked to Apple's stock performance, up from 50%, the company said.
A breakdown of Cook's income in the federal filing shows he made just under $83 million in stock awards, $12 million in incentives and $3 million in salary.
He also receives a lavish benefits package that includes a personal security detail, private plane, a generous 401K contribution match, plus more than $46,000 at his disposal in a vacation spending account.
The company's compensation board said it moved on Cook's salary in response to last year's say-on-pay vote, in which support for Cook's salary plunged by more than 30%. Two years ago, 95% of shareholders approved of Cook's pay, compared to only 64% last year.
In recent months, the tech industry has come under increasing pressure from institutional investors to scale back on executive salaries. At Apple's annual meeting last year, shareholders were advised by expert analysts to vote against Cook's pay package.
From there, Apple's compensation board -- made up of Art Levinson, Al Gore and Andrea Jung -- asked institutional shareholders how they felt about Cook's pay.
"Based on these important conversations, we have made changes to the size and structure of Tim's 2023 compensation," the committee wrote, while suggesting other changes could be down the road.
"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," the committee said.
Still, Cook was still praised for his performance over the past year, with the company's board expressing confidence in the CEO's long-term strategic goals.
Apple, which consistently ranks among the most lucrative companies in the world, has seen a colossal expansion under Cook's leadership. In 2022, Apple saw its market capitalization rise above $3 trillion. Although company shares have since fallen by as much as 27%, the stock was still trading at an incredible return of 1,212%.
Depending on how shares perform this year, Cook's income might soar again, but his payday is not likely to be as big after the tech giant dialed back his annual stock equity award.
That incentive allowed Cook to cash in on a much bigger salary in 2022, but this year he is capped from making more than about $75 million, according to documents filed with the government.
The company also made cuts to the number of restricted stock units that Cook could take with him if he retires early.
Cook has been paid a $6 million bonus on top of a $3 million annual base salary since 2016, and is estimated by Forbes to be worth about $1.7 billion.
In September 2020, Cook received a stock grant that would have paid him 1 million shares worth $114 million through 2025 if the company hit all its financial targets. A similar stock option given to Cook in 2011 reached a full value of $900 million in 2020.