SAN FRANCISCO (Reuters) -Apple Inc. announced in its annual power of attorney dossier on Tuesday that it will change executive cash bonuses based on whether the executives act within the social and environmental value of the company.
However, the maker of the iPhone did not specify how it would evaluate the progress with the company’s public goals, such as removing carbon from its supply chain.
Apple cites six values that include environmental practices, such as the use of recycled materials in products, diversity and inclusion among its staff, and the privacy and safety of its devices.
“From 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 documentation reads.
Apple has said that its minimum performance requirements, its targets and the maximum payout of cash bonuses to executives will not change.
But the remuneration committee of its board will use the new modifier to increase or decrease bonus payouts by up to 10% “based on the remuneration committee’s evaluation of the performance of our nominated executives regarding Apple Values and other important community initiatives during 2021. ”
The submission did not set out how the committee would evaluate executives based on progress with Apple’s publicly announced objectives around its values.
Apple said in July that it plans to remove carbon emissions from its entire business, including its products and extensive supply chain, by 2030. At the time, the company said it wanted to achieve 75% of the target by reducing emissions, with the remaining 25% coming from carbon offsets or compensation projects such as planting trees and restoring habitats.
Apple cited the new modifier in its recommendation to vote against a shareholders’ proposal to reduce management pay compared to Apple’s average employee pay. CEO Tim Cook’s compensation for $ 14.8 million in 2020 was 256 times greater than the average Apple compensation of $ 57,783.
“The compensation of America’s ballooning is not responsible for society, but neither is it for the economy, especially not in the current pandemic crisis. The reduction of the (designated executive officer) pay ratios must be included in the principles of the executive compensation program, ”reads the proposal.
Report by Stephen Nellis in San Francisco Edited by Chris Reese and Matthew Lewis