The success of Apple is largely possible thanks to its executives. Tim Cook and the rest of the management team receive generous bonuses in addition to their base salary. Something that not everyone agrees with, at least in the amount. This is reflected in a lawsuit filed against Apple, which claims that the CEO of Apple had been overpaid in 2021 and 2022. As reported by Reuters, but in a recent court decision, Apple has been cleared of facing such a lawsuit. With this, the allegations suggesting excessive compensation towards its management team are dispelled.
A dismissed lawsuit
The lawsuit was filed by a pension fund affiliated with the International Brotherhood of Teamsters, and argued that in 2021 and 2022, Apple respectively granted $92.7 million and $94 million to Tim Cook and four other executives. According to the fund, this was due to an incorrect calculation of the value of performance-based stock awards, alleging that the compensation committee intended to award only $77.5 million each year.
The pension fund lawyers attributed the alleged error to an inappropriate calculation by the fair value committee of the shares at the time of the grants. They claimed that this misled the shareholders, who have the right to vote on a consultative basis on the compensation received by the executives.
However, District Judge Jennifer Rochon in Manhattan disagreed with these allegations. In her ruling, she pointed out that Apple had accurately described its payment methods in the detailed compensation tables in its 2023 statement, complying with securities laws and regulations of the United States Securities and Exchange Commission.
In addition, Judge Rochon found that there is no evidence that Apple’s board of directors acted inappropriately when granting the compensation and mentioned that the plaintiff did not give the board enough time to consider his objections before proceeding with the lawsuit.
Let’s remember that it was in 2023 when Tim Cook —who has a clear successor— decided to lower his salary, which went from about 99 million dollars in the previous year to just over 63 in a readjustment in the company’s compensation structure. Meanwhile, any doubts about the previous compensations of Apple’s executive team are resolved.
