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Tim Cook agreed to cut his salary for his work as the head of Apple this year by 50%.
The compensation package of the leaders of large corporations is usually tied to the results of their activities, which creates additional motivation. It was revealed this week that Apple CEO Tim Cook, on his own initiative, requested a 50% reduction in his compensation package this year from last year's level. As a result, he should receive only $49 million in remuneration for his work.
At the same time, the variable component of the compensation package, measured by the Apple shares transferred to it, depending on their market rate, will increase from 50% to 75% this year, according to documents filed by the company with US regulatory authorities. In subsequent years, this proportion will continue. Over the past year, Tim Cook has received almost $100 million for his work as the head of Apple, and only $3 million of this amount was a base salary, about $83 million was paid in shares, the rest of the payments were bonuses. In 2021, Cook received about $99 million, so the composition of his income in 2023 will undergo major changes.
As Apple notes in its documents, such changes were dictated by both a balanced decision of shareholders and the initiative of Tim Cook himself. An increase in the share of the compensation package, expressed in shares of the company, should motivate its head to contribute to the positive dynamics of the share price and the growth of business capitalization. However, in absolute terms, Cook's planned Apple stock compensation for the current year will be reduced from $75 million to $40 million, while the $3 million base salary and $6 million bonus will remain the same. Tim Cook intends to donate part of his income to charity. Now the head of Apple is 62 years old, and if he retires before 2026, he will receive less shares of the company compared to a longer period of work.
The practice of voluntary reduction of remuneration among corporate executives is not so common. In this sense, 2021 was characterized by a boom in income growth among the leaders of this link, historical records were updated. Apple intends to hold a shareholder meeting on March 10, 2023 in absentia. Last year, the company's shares fell by 27%, although in general the technology sector of the US stock market sank more. Since the beginning of this year, Apple shares have risen in price by 2.7%.