The lawsuit, initiated by a pension fund associated with the International Brotherhood of Teamsters, targeted the compensation awarded to Tim Cook and four other Apple executives in 2021 and 2022.
The fund alleged that Apple had overpaid its top executives by tens of millions of dollars, attributing the supposed overcompensation to an incorrect calculation of performance-based stock awards’ values. According to the lawsuit, the awards amounted to $92.7 million and $94 million for the years 2021 and 2022, respectively, instead of the intended $77.5 million annually.
The plaintiff argued that the compensation committee’s miscalculation of the restricted stock unit’s “fair values” misled shareholders during advisory votes on executive pay, also known as “say-on-pay”.
However, U.S. District Judge Jennifer Rochon ruled in favor of Apple, stating that the company had accurately described its compensation methods in its 2023 proxy statement, in full compliance with securities laws and the regulations of the U.S. Securities and Exchange Commission.
Judge Rochon further highlighted the lack of evidence suggesting any wrongdoing by Apple’s board of directors in determining executive compensation. She also noted that the plaintiffs had not allowed the board sufficient time to address their concerns before proceeding with legal action.
Apple’s proxy filings reveal that Tim Cook’s compensation for the years 2021 and 2022 was approximately $99 million annually, which included over $82 million in stock awards each year.
For 2023, Cook’s total compensation was reported at $63.2 million, indicating a decrease from the previous years.