Lawsuit alleging Apple’s excessive payment to CEO Tim Cook and others dismissed
On Wednesday, a federal judge dismissed a lawsuit that alleged Apple had overpaid its Chief Executive Tim Cook and other top executives by tens of millions of dollars due to an incorrect calculation of the value of performance-based stock awards.
U.S. District Judge Jennifer Rochon in Manhattan said the iPhone maker described its pay methodology in detailed compensation tables in its 2023 proxy statement “accurately” under securities laws and U.S. Securities and Exchange Commission rules.
Rochon also found no evidence of wrongdoing by Apple’s board in awarding wages and said the plaintiff, a pension fund affiliated with the International Brotherhood of Teamsters, did not give the board enough time to consider its objections before filing suit.
The pension fund’s lawyers did not immediately respond to requests for comment.
The plaintiff said Apple awarded Cook and four other executives $92.7 million and $94 million in performance-based restricted stock units in 2021 and 2022, respectively, even though its compensation committee intended to award only $77.5 million a year.
It attributed the alleged error to the committee’s miscalculation of the fair values of the RSUs at the time of the grants and said it misled shareholders who would cast advisory votes on executive compensation, known as “say-on-pay.”
Cook’s compensation totaled about $99 million in both 2021 and 2022, including more than $82 million in stock awards each year, Apple’s proxy filings show.
His total salary dropped to $63.2 million in 2023. Four other Apple executives were awarded more than $26 million for each of the three years.
The case is International Brotherhood of Teamsters, Garage Employees Local 272 Labor Management Pension Fund v Apple Inc et al, US District Court, Southern District of New York, No. 23-01867.
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