Apple Defends Against Lawsuit Claiming CEO Tim Cook Was Overpaid: Every Detail

On Wednesday, a federal court rejected a complaint alleging that Apple had miscalculated the value of performance-based stock awards, resulting in overpayment of Chief Executive Tim Cook and other senior executives by tens of millions of dollars.

The iPhone manufacturer outlined its pay practices in comprehensive compensation tables in its 2023 proxy statement, “precisely” as required by securities laws and U.S. Securities and Exchange Commission standards, according to U.S. District Judge Jennifer Rochon in Manhattan.

The plaintiff, a pension fund connected to the International Brotherhood of Teamsters, claimed that the board was not given enough time to examine its concerns before filing a lawsuit, but Rochon also found no evidence that Apple’s board of directors had acted unlawfully in allocating compensation.

Requests for response from the pension fund’s attorneys were not immediately answered.

The complaint claimed that while Apple’s pay committee had only planned to award $77.5 million annually, it gave Cook and four other executives performance-based restricted stock units worth $92.7 million and $94 million in 2021 and 2022, respectively.

It said the mistake was caused by the committee’s incorrect estimation of the RSUs’ fair values at the time of the awards and that it deceived shareholders who would be voting “say-on-pay,” or advisory votes, on CEO remuneration.

According to Apple proxy filings, Cook received pay of around $99 million in 2021 and 2022, which included over $82 million in stock awards annually.

In 2023, his total compensation dropped to $63.2 million. Over $26 million was given to each of the other four Apple executives over the course of the three years.

U.S. District Court, Southern District of New York, No. 23-01867 is the court case in International Brotherhood of Teamsters, Garage Employees Local 272 Labor Management Pension Fund v. Apple Inc et al.