Apple CEO Tim Cook to take a 40% pay cut this year

Apple CEO Tim Cook looks at a new iPhone 14 Pro during an Apple special event in September  (Justin Sullivan / Getty Images)
Apple CEO Tim Cook looks at a new iPhone 14 Pro during an Apple special event in September (Justin Sullivan / Getty Images)

Apple CEO Tim Cook will see his annual pay slashed by 40 per cent this year to $49 m (£45.1 m).

A regulatory filing revealed that Cook requested the reduction following criticism from Apple shareholders.

In late December, Apple shares hit their lowest level since June 2021, as investors shed tech stocks and the company grappled with iPhone supply shortages during the crucial Christmas holiday period.

Though Cook receives a salary of $3 m (£2.5 m), his incentives and stock awards saw that number climb to $83 m (£68 m) in total compensation last year.

He also received benefits, including retirement plan contributions, private security, use of a private jet, and more than $46,000 (£38,000) in vacation expenses – bringing the total figure to $99.4 m (£82 m).

The main change to his compensation relates to how he is granted Apple shares. This year, 75 per cent of his awarded shares are tied to Apple’s stock performance, compared to 50 per cent last year.

For this year, his stock award target has been cut to $40 m (£33 m), with three-quarters of that dependant on share performance.

Apple said it made the decision in response to a drop in shareholders’ approval of Cook’s pay package, which was down to 64 per cent last year from 95 per cent in Apple’s 2020 fiscal year.

“The Compensation Committee balanced shareholder feedback, Apple’s exceptional performance, and a recommendation from Mr Cook to adjust his compensation in light of the feedback received,” Apple said in a filing with a US financial watchdog.

Cook’s personal wealth is currently estimated at $1.7 billion ($1.4 bn) by Forbes magazine, which claims he owns 3.3 million shares of Apple, amounting to a less than one per cent stake in the company.

Cook took over the top job at Apple in 2011, after serving as CFO under Steve Jobs. His predecessor was famously only paid a $1 annual salary, though he made plenty of money from his ownership of 5.5 million Apple shares.

Under Cook’s leadership, Apple has seen its services business - including its App Store and Apple Music streaming app - emerge as a major money-spinner.

Apple revealed it had 900 million subscriptions last year, up from 745 million subscriptions in 2021. Overall, its services business grew to $78.1 bn (£63 bn) in fiscal year 2022, a 14 per cent increase over the prior year.

During Tim Cook’s tenure, Apple also briefly became the first $3 trillion (£2.4 tn) company, before plummeting to its current market cap of $2.12 tn (£1.8 tn), as big tech grappled with a slowdown in growth after witnessing a pandemic boom.

Nonetheless, Apple’s board reaffirmed its belief in Cook and praised his “outstanding leadership”.