Tim Cook will voluntarily cut his own compensation package by about $50 million

By: Maksim Panasovskyi | 13.01.2023, 14:06
Tim Cook will voluntarily cut his own compensation package by about $50 million

The remuneration of CEOs of large companies is tied to performance, so base salaries make up only a few percent of the total compensation package. This is considered an effective motivational mechanism. Meanwhile, the head of Apple, Tim Cook, has decided to voluntarily cut his own remuneration in half.

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The Cupertino CEO's 2022 compensation package was about $100 million. Tim Cook received $83 million in Apple stock, while his base salary was only $3 million, about 3 percent of his total compensation. The other $14 million was a bonus.

In 2021, the CEO of the California giant also received about $100 million, but at the end of 2023, his compensation package will be drastically reduced. At the initiative of Tim Cook himself, which was supported by shareholders, the remuneration of the head of Apple in the current year will be reduced by 50% to about $49 million.

In this case, Tim Cook should be even more interested in the growth of Apple's share price. This is due to the fact that starting from 2023, the variable component of remuneration will be 75% instead of 50%, and it will be measured by the transferable securities of the company, depending on their price.

Thus, at the end of 2023, the head of Apple will receive $40 million in shares, a bonus of $6 million, and his salary will remain unchanged ($3 million). Cook plans to spend part of his fee on charity.

Source: Bloomberg