Source: Fortune
Summary
CEOs are protecting their pay packages by lowering their performance targets, citing uncertain macroeconomic outlooks and external factors. Apple’s CEO Tim Cook’s bonus targets were set at or below the prior year’s result, guaranteeing a $12 million bonus. An analysis of 50 public companies found that boards set lower targets, wider performance curves, and flatter payout ranges to protect CEO pay. CEOs collected 87% of their target bonuses, up from 77% in 2024.
Our Reading
The numbers tell one story.
CEOs are using reduced targets, selfless rhetoric, and blame to protect their pay packages. Apple’s Tim Cook is a prime example, with his bonus targets set low enough to guarantee a $12 million bonus. The trend is widespread, with boards setting lower targets and wider performance curves to ensure CEOs meet their targets. The result is rising CEO pay, despite declining earnings.
The strategy enters a familiar phase: when times are bad, CEOs become masters of blame and deflection.
Author: Evan Null
