Tim Cook might get huge pay cut in 2023

Apple CEO Tim Cook is likely to take a massive pay cut in 2023.

In a proxy statement for shareholders released by Apple, one of the proposals is to reduce Cook’s compensation from $99 million in 2022 to $49 million this year. According to the document, the cut was proposed by Apple’s Compensation Committee, which consists of three Apple board members proposing executive compensation at the company, due to shareholders’ concerns (among other things) about Cook’s overall compensation.

“Mr. Cook’s 2023 target total compensation is $49 million, a reduction of over 40% from his 2022 target total compensation. The Compensation Committee also intends to position Mr. Cook’s annual target compensation between the 80th and 90th percentile relative to our primary peer group for the years to come,” the document said.

According to the document, Cook supports the changes for his compensation.

The proxy statement was released ahead of Apple Investor Day, scheduled for March 10, when shareholders will vote to accept or reject the proposal.

It’s worth noting that Cook’s total 2022 compensation target was actually $84 million, but Cook earned more because Apple met certain sales and income goals. Cook’s 2023 base salary is set to be $3 million and his annual cash incentive will be set at $6 million — both the same as last year. His 2023 stock value is estimated at $40 million compared to $75 million last year, and a higher portion of his stock award value is tied to performance.

Other top Apple executives — CFO Luca Maestri, COO Jeff Williams, SVP of Retail and People Deirdre O’Brien, and SVP, General Counsel and Secretary Kate Adams — will receive the same target compensation as last year.

While the primary reason behind the proposed pay cut appears to be shareholder feedback, it’s likely Apple is also preparing for a possible 2023 recession. Apple has weathered the pandemic years well, but sales have suffered from supply chain constraints lately. The company’s shares fell 24 percent over the past year, briefly pushing its market cap below $2 trillion in December 2022.