Apple will not have to face an investor lawsuit accusing it of overpaying CEO Tim Cook and other top executives by tens of millions of dollars, after a federal judge on Wednesday dismissed the case (via Reuters).
The plaintiff, a pension fund affiliated with the International Brotherhood of Teamsters, said Apple in 2021 and 2022 awarded a respective $92.7 million and $94 million to Cook and four other executives by improperly calculating the value of performance-based stock awards. The plaintiff argued its compensation committee intended to award just $77.5 million each year.
The alleged error was attributed by the pension fund's lawyers to the committee's improper calculation of the restricted stock unit's "fair values" at the time of the grants, and said it misled shareholders who would be casting advisory votes on executive compensation, known as "say-on-pay."
U.S. District Judge Jennifer Rochon disagreed, however, saying Apple described its pay methods in detailed compensation tables in its 2023 proxy statement "precisely," as securities laws and U.S. Securities and Exchange Commission rules require.
The Manhattan judge also found no proof that Apple's board of directors acted improperly in awarding pay, and said the plaintiff did not give the board enough time to consider its objections before suing.
Apple proxy filings show Cook's compensation totaled about $99 million in both 2021 and 2022, including more than $82 million of stock awards each year. Cook's total pay declined to $63.2 million for 2023.
