A leading shareholder advisory group has recommended that Apple investors vote against Tim Cook’s $99 million compensation and bonus package, forcing one of Silicon Valley’s most prominent activists out of equality to defend his compensation at the most valuable company in the world.
Institutional Shareholder Services told clients in a letter seen by the Financial Times that there was “great concern” about the share award Cook received last year, which was the chief executive’s first. Apple since 2011. ISS last recommended against Apple’s salary in 2015.
Last year, Cook received shares worth $82 million at the time of grant, in addition to a cash bonus of $12 million and a salary of $3 million.
The executive’s pay package also included $630,630 in personal security costs and $712,488 for personal use of a private jet – benefits that ISS said “significantly outpaced” comparable companies the year latest — bringing Cook’s total for 2021 to $98.7 million.
Apple declined to comment on ISS’s recommendations.
Cook’s consistent leadership was widely praised as he guided Apple to become the first company to reach a market capitalization of $3 billion in early January, dispelling early doubts about whether the company could thrive after the death of its co-founder Steve Jobs in 2011.
While Jobs was known for his bold new product launches, including the iPod and iPhone, Cook was recognized for his operational expertise and political acumen, including his campaigns for social equality and life private.
Total shareholder return under Cook now exceeds 1,000%, including a nearly 30% increase in Apple’s share price over the past 12 months. While shares have traded slightly lower so far this year, Apple has been sheltered from the broader tech stock selloff after announcing fourth-quarter 2021 earnings jumped 20% to 34 .6 billion.
Shareholder votes on Apple’s executive packages are advisory only and don’t require its board to take action in response. About 95% of the votes cast last year were in favor of Apple. But a major protest this year could sway Apple’s board, nine years after the previous significant backlash over Cook’s pay.
ISS’s negative recommendation for Apple comes after a record number of S&P 500 companies last year failed to garner 50% support for a pay vote at annual meetings.
Last year, Cook completed his first decade as Apple’s chief executive. This anniversary triggered the vesting of the last tranche of the stock award that was granted when he became chief, as well as a new incentive program.
The 2011 scale was modified in 2013 to add performance criteria for half of the award. About a third of Apple shareholders registered a protest vote on executive pay at the company’s annual meeting earlier that year.
Cook achieved those goals after Apple’s total shareholder return reached 192% in the three years to August 2021, according to regulatory filings. He sold $752 million worth of Apple stock in the same month.
In its annual report proxy statementReleased last month, Apple’s board pointed to revenue and profit in 2021 that “significantly exceeded” company goals, triggering the maximum performance-based bonus payouts for executives.
Apple said its board’s compensation committee “will continue to consider shareholder feedback and the results of say-on-pay votes when making future compensation decisions.”