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A federal judge on Wednesday dismissed a lawsuit accusing Apple of overpaying Chief Executive Tim Cook and other top executives by tens of millions of dollars by miscalculating the value of performance-based stock awards.
U.S. District Judge Jennifer Rochon in Manhattan said the iPhone maker 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.
Rochon also found no proof that Apple’s board of directors acted improperly in awarding pay, 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 suing.
Lawyers for the pension fund did not immediately respond to requests for comment.
The plaintiff said Apple in 2021 and 2022 awarded a respective $92.7 million and $94 million of performance-based restricted stock units to Cook and four other executives, though its compensation committee intended to award just $77.5 million each year.
It attributed the alleged error to the committee’s improper calculation of the RSUs’ 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.”
Cook’s compensation totaled about $99 million in both 2021 and 2022, including more than $82 million of stock awards each year, Apple proxy filings show.
His total pay declined to $63.2 million for 2023. The four other Apple executives were each awarded more than $26 million in 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, U.S. District Court, Southern District of New York, No. 23-01867.
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