Apple CEO Tim Cook Is Taking A Big Pay Cut In 2023 - But He's Still Making Bank
Apple CEO Tim Cook has had an exceptional run as the company's top executive since he took over the company well over a decade ago. Under his stewardship, Apple has launched several successful products, including successive generations of iPhones, iPads, the Apple Watch, and multiple generations of Mac computers. Cook also played a vital role in expanding Apple's operations in China, where it manufactures the majority of its products — and more recently India, which is now a focus market for Apple.
Cook has also received widespread praise for the manner in which he led Apple through the COVID-19 pandemic. Apple shareholders have also been largely happy with Cook's leadership, given the company's stocks have given exceptional returns (via Forbes) since he took over. Tim's outstanding performance as Apple CEO has also made him one of the highest paid CEOs in the U.S.: as of 2022, he had an estimated personal wealth (Via Forbes) amounting to $1.7 billion. In 2021, Tim Cook's compensation amounted to a little over $98 million. However, in light of the gloomy economic scenario and unforeseen challenges faced by Apple in 2022, a section of Apple shareholders were unsure if Cook should be entitled to the same fat paycheck as before.
In the recently published annual proxy statement for investors, Apple shared an important update concerning Tim Cook's compensation. The filing reveals that Cook will take a significant pay cut in 2023 in light of the current global scenario. The report also indicated that it was Cook himself that recommended the pay cut after he acknowledged the general sentiment of Apple investors.
Tim Cook's pay cut by a massive 40%
Citing the Apple proxy statement for investors, 9to5Mac revealed that Tim Cook's pay package would be reduced to $49 million, which is 40% lower than his target pay for 2022 — amounting to $99.4 million. It is also pertinent to note that nearly 75% of Cook's pay package is tied to Apple's shares and its performance. With Apple stocks falling by 27% in 2022, there was investor pressure on Apple to reduce Cook's pay, and several shareholders voted against Cook's existing compensation package.
In light of investor feedback, Cook also suggested it was in the company's best interest to adjust his compensation accordingly. Note that the change to Cook's compensation does not affect his base salary, which amounts to $3 million. He is also entitled to an additional $6 million bonus. Apple's board issued a statement in light of the developments, stating that Tim Cook's revised pay package is "responsive to shareholder feedback, while continuing both to align pay with performance and to recognize Mr. Cook's outstanding leadership."
With several forecasts painting a gloomy economic picture for 2023 (via CNBC), it remains to be seen if Tim Cook will see additional cuts to his paycheck in the years to come. It would also be interesting to see how quickly Apple bounces back from the series of setbacks it faced in China, which in turn led to lower-than-expected shipment figures for the company's bread-and-butter iPhone 14 models.