Apple could cut, or raise, executive bonuses by 10% based on their performance on environmental and social issues in 2021


Apple will partly decide 2021 bonuses for executives based on their performance against social and environmental standards, it said Tuesday.

The "environmental, social, and governance modifier" can affect payments by up to 10% either way, the tech giant said in its annual proxy statement Tuesday. 

"Beginning in 2021, an environmental, social, and governance modifier based on Apple Values and other key community initiatives will be incorporated into our annual cash incentive program," the company said in the filing.

The company has six core values: accessibility, education, environment, inclusion and diversity, privacy and security, and supplier responsibility.

Apple did not say exactly how it would measure performance against these values.

In the same filing, Apple disclosed that its top five executives earned a combined $120 million in 2020. CEO Tim Cook's pay package totaled $14.7 million in 2020, roughly a 28% jump from 2019. This meant he was paid 256 times as much as the company's median employee.

Apple has repeatedly been accused of benefiting from forced labor in China. 

A December report from the Tech Transparency Project accused a major Apple supplier of using forced labor from thousands of Uighur workers to make glass for iPhones. At the time, an Apple representative told The Washington Post the company "has zero tolerance for forced labor. Looking for the presence of forced labor is part of every supplier assessment we conduct, including surprise audits."

Former employees have also accused Apple of turning a blind eye to suppliers that were violating Chinese labor laws.

Apple introduced the new criteria to motivate exec members to meet "exceptionally high standards of values-driven leadership" alongside reaching financial targets, the company said.

The company's maximum annual bonus payouts won't change, it added.

Decisions on whether to award increase or decrease the bonus payouts will be made by Apple's Compensation Committee, who will evaluate performance with respect to Apple Values and "other key community initiatives."

"The Compensation Committee will use the modifier to determine whether to increase or decrease the bonus payouts by up to 10%," it said.

In October, a report by Semler Brossy Consulting Group found that big businesses were protecting exec pay by rewriting bonus plans and changing performance targets during COVID-19.

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