Big Tech companies have made headlines for all the wrong reasons in recent months, cutting jobs while placing heavy investments into artificial intelligence, but Apple CEO Tim Cook decided to slash his own compensation in 2023 instead. Elon Musk famously laid off most of Twitter's staff after taking over as CEO, and social media giant Meta eliminated positions as well. Most recently, Alphabet — the company that owns Google — cut 12,000 jobs in January 2023, equaling six percent of the corporation's global workforce. Prospects are grim for both companies and employees in the tech industry at the moment, but Apple has chosen a rare alternative to the trend.
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A filing with the U.S. Securities and Exchange Commission (SEC) included Apple's compensation plan for its top executives, including Cook, the chief-executive. Though most companies increase the salaries of successful executives each year, that wasn't the case for Apple. Cook requested Apple's board of directors decrease his compensation, in part due to a vote that found a sizable portion of shareholders did not approve of the 2022 figure. As mentioned in the filing, Apple's board responded by decreasing Cook's compensation by 40 percent. He will receive $49 million in 2023, according to the documents.
Related: Tim Cook's First Decade As Apple CEO Has Been A Wild Ride
Why Tim Cook Took A Pay Cut At Apple
It certainly helps that Apple is paying its top executive 40 percent less than last year, but there's another reason why Cook is earning less. Each year, Apple and other companies ask their shareholders to vote on named executives' compensation packages and salaries. That list of named executives includes Cook, but also other executives, like COO Jeff Williams. Apple's shareholders did not vote overwhelmingly in favor of Cook's compensation, thus explaining the drop in pay for 2023.
Specifically, 64 percent of shareholders voted in favor of Cook's 2022 salary. While that is a majority, it isn't nearly as high as prior percentages. For example, back in 2020, 95 percent of shareholders approved of Cook's compensation plan. These findings influenced Cook's decision to reduce his salary in 2023, but will also likely affect his salary for future years. "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 in the filing.
Cook's pay cut doesn't mean he is underwhelming as CEO, and in fact, Apple's board said the opposite. His target compensation for 2023 includes a $3 million base salary, a $6 million annual cash incentive, and $40 million in Apple stock awards.
