Apple is the most valuable company on the planet. And as a reward for the iPhone maker’s success, CEO Tim Cook is expected to receive nearly $100 million in compensation in 2021.
But an influential shareholder rights group has some problems with Cook getting such a huge payout.
Institutional Shareholder Services (ISS) said in a report on Wednesday that “there are significant concerns regarding the design and magnitude” of the amount of shares that Cook is being awarded.
As a result, ISS is recommending that investors vote against a proposal to ratify Cook’s compensation at Apple’s March 4 shareholders’ meeting.
Apple disclosed in its proxy application to the Securities and Exchange Commission earlier this year that Cook is expected to receive $82.3 million in stock awards, in addition to his $3 million annual salary and other compensation. The total package comes in at $98.7 million, up from $14.8 million in 2020.
The ISS notes that “half the award lacks performance criteria”. The ISS also has an issue with Apple, saying the company does not detail whether the compensation package covers premiums beyond 2021, which is a concern given “its large size,” the group said.
“Given that CEO Cook will be eligible for retirement treatment after one year from the award date, the award’s retention amount is limited,” the ISS said.
Cook’s assets would continue to be fully acquired even after he retires, which the ISS also opposes, arguing that Apple doesn’t need to give Cook as much financial incentive to remain CEO.
Apple did not comment on the ISS report. But it’s worth noting that another shareholder advisory firm, Glass Lewis, backed the proposal.
And Apple also noted in its proxy statement that Cook’s stock award is the first he’s received since becoming CEO, just before Steve Jobs died in 2011.
“It’s been a remarkable decade for Apple,” the company said in the proxy statement.
Shareholders rarely vote against proposals a company recommends for approval, although they have managed to gain some support in recent years.
In 2021, investors voted against executive compensation packages from Intel, General Electric and CNN owner AT&T. These votes were largely symbolic and boards are not required to change compensation plans even if shareholders reject them.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
