A major proxy advisory firm has called on Apple shareholders to vote against CEO Tim Cook’s near $100 mn pay package, setting up a showdown over executive pay at the world's largest public company.
ISS has released a report to clients that says it has ‘significant concerns’ over the design and size of the payout, which includes an $82 mn stock award, $12 mn bonus and $3 mn annual salary.
‘Half of the award lacks performance criteria and the proxy does not state that the award will cover future years of awards notwithstanding its large size,’ says ISS in the recommendation to clients.
The advisory firm also notes the ‘large’ travel and security costs made available to Cook last year. ‘The company provided aircraft expenses of $712,488 and security expenses of $630,630 to the CEO,’ says ISS.
Each year US companies must submit their executive pay to a shareholder vote, but the result is only advisory in nature. Apple’s annual shareholder meeting is due to take place on March 4 in a virtual format.
The criticism of Cook’s payout comes despite Apple’s strong market performance during his years in charge of the tech giant. Cook became CEO in 2011 and since then the company has seen a total shareholder return of more than 1,000 percent, compared with around 300 percent for the S&P 500.
Last year marked the end of the incentive plan that was set up when Cook took over as CEO. In August an SEC filing showed Cook had received around 5 mn Apple shares under the final tranche of the scheme, worth roughly $750 mn at the time.
As the previous incentive plan came to an end, last year Cook received a new stock award for the first time since 2011.
‘The structure of this award is better aligned with the performance-based and time-based [restricted stock units] awarded to our other named executive officers, while the amount recognizes his exceptional leadership and is commensurate with the size, performance and profitability Apple has achieved during his tenure,’ says the company’s 2022 proxy statement.
Apple has been contacted for comment.