Norway’s gigantic sovereign wealth fund is not enamored with the nearly $100 million pay package Apple has proposed CEO Tim Cook to compensate his 2021 achievements, and will express that displeasure by voting against it when shareholders meet on March 4.
Norway’s $1.3 trillion sovereign fund, the largest on the planet, is a major investor in Apple, whose $2.8 trillion market cap is top among global companies. The fund’s 1.03% stake of the Cupertino giant ranks it Apple’s eighth-largest investor. That heft makes its decision Sunday to oppose Cook’s 2021 plan potentially problematic for the CEO to gain the majority backing of shareholders needed to approve his $99 million package.
Details of Cook’s compensation were contained in a proxy filing last month indicating that in addition to his $3 million salary, the Apple boss made $82.3 million in awarded stock, $12 million for fulfilling company targets, and $1.4 million from diverse sources. The grand total came to $98.7 million – 1,447 times the company’s average employee remuneration – and was far higher than the $14.8 million he made in 2020.
Still, given the repeated product triumphs since Cook took the controls in 2011 – and 1,000% multiplication of Apple stock price since then – it might seem a bit parsimonious to deny him.
Yet the Norges Bank Investment Management (NBIM) that manages Norway’s sovereign wealth fund will vote to do just that. It said Sunday it will follow the advice of respected advisory firm, Institutional Shareholder Services (ISS), which has taken issue with the payout as being short on target-based conditions and longer-term commitments.
“(H)alf of the award lacks performance criteria,” ISS said. “Given that CEO Cook will be eligible for retirement treatment after one year from the grant date, the retentive value of the award is limited.”
NBIM went further in explaining its decision to follow NBIM’s no-vote advice.
“A substantial proportion of annual remuneration should be provided as shares that are locked in for five to ten years, regardless of resignation or retirement,” NBIM said. “The board should provide transparency on total remuneration to avoid unacceptable outcomes. The board should ensure that all benefits have a clear business rationale.”
While it’s rare for shareholders to vote down executive pay proposals, that has on occasion happened. With Norway’s sovereign wealth fund clearly set on casting a nei ballot on Cook’s compensation in March, it remains to be seen whether other Apple stock owners follow suit, or take a decade-wide view in rewarding him as planned.
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