Apple beats CEO Tim Cook and others overpaid lawsuit

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A federal judge on Wednesday dismissed a lawsuit that alleged Apple overpaid 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 payment methods in detailed compensation tables as required by securities laws and U.S. Securities and Exchange Commission rules in its 2023 proxy statement.

Rochon also found no evidence that Apple's board of directors acted improperly in awarding the pay and that 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.

Lawyers for the pension fund did not immediately respond to requests for comment.

Apple awarded Cook and four other executives $92.7 million and $94 million in performance-based restricted stock units in 2021 and 2022, respectively, but its compensation committee intended to award only $77.5 million each year, the plaintiffs said.

The alleged error was attributed to the committee's miscalculation of the fair values ​​of the RSUs at the time of grants, and said it misled shareholders casting advisory votes on executive compensation, known as “say-on-pay.”

Cook's compensation will be about $99 million in both 2021 and 2022, including stock awards of more than $82 million each year, Apple proxy filings show.

His total salary drops to $63.2 million for 2023. Four other Apple executives were each awarded more than $26 million over 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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