Apple executives awarded $122 million in stock grants

[AppleInsider]

Apple last week granted more than $122 million in restricted stock-based compensation to members of its executive team for their current and future efforts in driving the company's success, regulatory filings with Securities and Exchange Commission show.

The grants for restricted stock units, which won't vest until March 24, 2012, aim to reward members of Apple's top brass for their performance thus far and lock them into their roles at the company for the foreseeable future. Should any of the executives vacate their position ahead of the vesting date, they'll forfeit their right to claim the shares.

In total, nine grants were issued ranging from 60,000 shares to 200,000 shares, which when combined carried a total market value of $122,101,600 based on the closing price of Apple shares Monday ($105.26).

The most heavily rewarded executives where Chief Operating Officer, Timothy D. Cook, who received 200,000 shares ($21,052,000), and Senior Vice President Retail, Ron Johnson, and Chief Financial Officer, Peter Oppenheimer, each of which were granted 150,000 shares ($15,789,000).

Five other executives were each granted 120,000 shares ($12,631,200), including Senior Vice President Worldwide Product Marketing, Phil Schiller; Senior Vice President Software Engineering, Bertrand Serlet; Senior Vice President Mac Hardware Engineering, Bob Mansfield; Senior Vice President Industrial Design, Jonathan Ive; and Senior Vice President iPhone Software, Scott Forstall.

Senior Vice President, General Counsel and Secretary, Daniel Cooperman, who came to Apple last year from Oracle, was issued a grant for 60,000 shares worth approximately $6,315,600.

[ View this article at AppleInsider.com ]

[bigmc6000]

So no word on dear ol' Steve-o?

Considering how much cash Apple has on hand I'm fine with these numbers...

Edit: Do they not do partial vesting? I mean, if they say fully vested at 5 years and you leave at 4 do you get nothing or do you get a % of that? I thought most all places did % based vesting...

[ByronVanArsdale]

Thanks bigmc6000 for your effort to clear up political confusion in previous post.

Can't wait to see what this post unleashes....

I can always tell when some is following the 'sound bite' instead of following the money.

[SpamSandwich]

Yeah, so what. There's nothing explosive about this post. Frankly, the way it's worded and the timing leads me to one conclusion. Stock influence or manipulation for AAPL shorts.

[Cubert]

Come on, man. Give Cubert some!

[ktappe]

I cannot name a time in recent memory that it'd be worse for this news to come out. The public (myself included) is VERY sensitive right now to the rich getting even more riches handed to them. So I'm really holding myself back right now to not light into Apple and ask how on earth these people managed to "earn" these millions of dollars. Oh, wait, I did just ask. Oh well--it needed asking.

[S10]

Originally Posted by ktappe

I cannot name a time in recent memory that it'd be worse for this news to come out. The public (myself included) is VERY sensitive right now to the rich getting even more riches handed to them. So I'm really holding myself back right now to not light into Apple and ask how on earth these people managed to "earn" these millions of dollars. Oh, wait, I did just ask. Oh well--it needed asking.

How did they earn these millions? Because they are doing a good job.
No need to worry about things you don't (want to) understand.

[Mystigo]

Apple's stock is pretty beat up right now. There's no temptation to fudge the dates on this grant as yesterday's price was a pretty sweet deal.

[bigmc6000]

Originally Posted by ByronVanArsdale

Thanks bigmc6000 for your effort to clear up political confusion in previous post.

Can't wait to see what this post unleashes....

I can always tell when some is following the 'sound bite' instead of following the money.

Umm, ok???

[Kasper]

Originally Posted by SpamSandwich

Yeah, so what. There's nothing explosive about this post. Frankly, the way it's worded and the timing leads me to one conclusion. Stock influence or manipulation for AAPL shorts.

Spam, the filings were published today. We reported on them today. They were made Sept 26th. There is no hidden agenda.

K

[dshel]

Perhaps this is part of a Succession Plan. Apple certainly needs one. It would quiet all those constant stock flucuations caused by Health rumors about Steve Jobs!

[paxman]

Originally Posted by ByronVanArsdale

Thanks bigmc6000 for your effort to clear up political confusion in previous post.

Can't wait to see what this post unleashes....

Well, let me unleash on a general note. If anyone deserves a bonus it must surely be the Apple execs. At least they didn't drive the company to the ground only to receive a bonus beyond what most people will earn in a lifetime! I am not sure how much each Apple exec will receive but on principle I am against massive bonuses. I know, I know... its what the market demands and is prepared to pay and what it takes to get and retain these people, but that doesn't make it right in my view. There is something obscene about the inequity of executive level compensation. I know all the arguments but I still find it hard to swallow that whilst some people get 'a few' millions for work well done others can't afford health care and decent food. Rewards where rewards are due, by all means, but its not as if these guys are struggling, nor as if they will have a problem getting another job, nor as if they'd sweep the street if that was better paid. Like I said, nothing against Apple, but this kind of news always make me wish we lived in a world where a more socialist distribution of wealth was not a sin.

[mezzkat]

Originally Posted by ktappe

I cannot name a time in recent memory that it'd be worse for this news to come out. The public (myself included) is VERY sensitive right now to the rich getting even more riches handed to them. So I'm really holding myself back right now to not light into Apple and ask how on earth these people managed to "earn" these millions of dollars. Oh, wait, I did just ask. Oh well--it needed asking.

Let's be clear. This is NOT a hand-out. Typically, the rich don't get hand-outs. Poor people get hand-outs. These stock payments are structured to payout in a way that requires these people to work hard and smart for the next 6 years! It's a carrot, an incentive plan. They don't get any money today. If any one of these people sits around and waits for the money to just come to them, they'll get nothing.

C-level execs are worth these payments because the work they do yields many times more millions of dollars for companies and shareholders. If you want a piece of this payment, buy Apple stock today, sit on your duff for 6 years, while these people work hard, and sell in 2012. That's more of a hand-out than this stock payment plan is.

[Booga]

Originally Posted by ktappe

I cannot name a time in recent memory that it'd be worse for this news to come out. The public (myself included) is VERY sensitive right now to the rich getting even more riches handed to them. So I'm really holding myself back right now to not light into Apple and ask how on earth these people managed to "earn" these millions of dollars. Oh, wait, I did just ask. Oh well--it needed asking.

On the contrary, this is EXACTLY the sort of compensation package top executives should be getting. Multi-million dollar salaries, bonuses, and golden parachutes are utterly ridiculous. Wall Street would do well to follow Apple's example and offer stock with a significant vesting/lock-out period. That way executives compensation is proportional to the added value they contribute to the shareholders.

[Lafe]

Originally Posted by Booga

On the contrary, this is EXACTLY the sort of compensation package top executives should be getting. Multi-million dollar salaries, bonuses, and golden parachutes are utterly ridiculous. Wall Street would do well to follow Apple's example and offer stock with a significant vesting/lock-out period. That way executives compensation is proportional to the added value they contribute to the shareholders.

Well said!

[Olternaut]

Originally Posted by ktappe

I cannot name a time in recent memory that it'd be worse for this news to come out. The public (myself included) is VERY sensitive right now to the rich getting even more riches handed to them. So I'm really holding myself back right now to not light into Apple and ask how on earth these people managed to "earn" these millions of dollars. Oh, wait, I did just ask. Oh well--it needed asking.

Your kidding.....right? This is one of the only tech companies right now with executives whom richly deserve a good reward for their work. Whatever their being paid its not enough. Oh, and....what Booga said!

[ktappe]

Originally Posted by S10

How did they earn these millions? Because they are doing a good job.
No need to worry about things you don't (want to) understand.

Do you do a good job? Do you get millions? Didn't think so. So make me understand how they do thousands of times more work than you. (Hint that you apparently need: They don't.)

Now, I'm sure a few of you (who have already piped up) will say I think these executives don't work. BS. I know they work and work hard. But neither they nor anyone else on the planet works $6 million hard. There are only 24 hours in a day and so many good ideas. THEY DO NOT DESERVE THIS MUCH MORE THAN YOU. Have enough faith that you're also a hard worker that you'll let yourself cease believing they are worth so much more than you are.

In Japan there's a law that the highest-paid executive of a company cannot be paid more then 100x what the lowest-paid employee of that company makes. This keeps people like you from not only accepting but encouraging the growth of the disparity of wealth in their country.

There was also an article earlier this year describing how Apple engineers are underpaid compared to other big tech companies in the Valley. How about these stock options get distributed to them instead of the fat cats? I'm sure Apple engineers work pretty hard too. And they'd work harder if you gave them incentives to.

Thank goodness the House vote yesterday reflects the fact that people who support huge corporate bonuses are now in a small minority.

[ktappe]

Originally Posted by Olternaut

Your kidding.....right? This is one of the only tech companies right now with executives whom richly deserve a good reward for their work. Whatever their being paid its not enough.

Then why don't you volunteer to pay $100 more for your next Apple product? After all, you think Apple execs need more than just $6 million in bonuses.

No, I'm not kidding at all. In an age when people cannot afford gasoline or rent or food, when houses have yet to be rebuilt after Katrina let alone Ike, bonuses like this to the already rich are just obscene. But even worse are those like you who support the continued flow of wealth from the poor to the rich. It's tearing this country apart and yet you defend it.

[sflocal]

These grants were handed out at the 52-week low. Sounds like sound planning on Apple's part. With these grants, the executives will do everything they can to keep the company innovating to get that stock price back to where it was.

I see no problems with this. I myself bought AAPL yesterday just before it closed and it looks to me that Apple is planning a long future.

This is not a handout. For those complaining or being "sensitive" to what happened yesterday, less talk and more action for you is needed. Go out and build your own multi-billion dollar company and do what you want with it. If you were in any of those executive's positions, you would be doing the exact same thing.

Don't hate the players. Hate the game.

[sflocal]

Originally Posted by ktappe

Then why don't you volunteer to pay $100 more for your next Apple product? After all, you think Apple execs need more than just $6 million in bonuses.

No, I'm not kidding at all. In an age when people cannot afford gasoline or rent or food, when houses have yet to be rebuilt after Katrina let alone Ike, bonuses like this to the already rich are just obscene. But even worse are those like you who support the continued flow of wealth from the poor to the rich. It's tearing this country apart and yet you defend it.

Based on the lecture you're giving, I sincerely hope you bought AAPL at yesterday's closing price. Then instead of being all talk, you could cash out the stock in a few weeks due and donate the gains to whatever non-profit institution or cause you want.

Get over it. There are bigger fish to fry in the financial sector than trying to persecute Apple for rewarding incentives considering the huge success they've been having.

However, I do think executives getting huge payouts and golden parachutes for having their companies fail should be shot.

[scottiB]

Well, today is the end of Apple's fiscal year. This may have something to do with the timing.

[bigmc6000]

Originally Posted by paxman

Well, let me unleash on a general note. If anyone deserves a bonus it must surely be the Apple execs. At least they didn't drive the company to the ground only to receive a bonus beyond what most people will earn in a lifetime! I am not sure how much each Apple exec will receive but on principle I am against massive bonuses. I know, I know... its what the market demands and is prepared to pay and what it takes to get and retain these people, but that doesn't make it right in my view. There is something obscene about the inequity of executive level compensation. I know all the arguments but I still find it hard to swallow that whilst some people get 'a few' millions for work well done others can't afford health care and decent food. Rewards where rewards are due, by all means, but its not as if these guys are struggling, nor as if they will have a problem getting another job, nor as if they'd sweep the street if that was better paid. Like I said, nothing against Apple, but this kind of news always make me wish we lived in a world where a more socialist distribution of wealth was not a sin.

You hit the nail on head - it's because every big time company seems willing to give these people insane amounts of cash. It's been happening for a while now. Some CEO did a good job at a company so another company thinks he'll be able to turn their company around so they pay him 20-30% more than he was getting and then it just kept going and going and going and now we've got this situation. It's really just pure capitalism but, not surprisingly, this method of picking off the top talent doesn't seem to make yours or my salary any higher (in fact it keeps it lower, obviously) because it seems to relate only to the upper echelon of large companies. And yeah, it's crappy and I wish more of them would willingly adhere to the re-distribution of wealth theory but we, as Americans, like to continue to save up for that "rainy day" regardless of of how big our rainy day fund gets.

At least Apple giving out some money isn't going to cost every person in America over $2300...

[SpamSandwich]

Originally Posted by Kasper

Spam, the filings were published today. We reported on them today. They were made Sept 26th. There is no hidden agenda.

K

OK, I believe you. Guess I'm a little irked with the state of the market right now.

[SpamSandwich]

Originally Posted by ktappe

Do you do a good job? Do you get millions? Didn't think so. So make me understand how they do thousands of times more work than you. (Hint that you apparently need: They don't.)

Now, I'm sure a few of you (who have already piped up) will say I think these executives don't work. BS. I know they work and work hard. But neither they nor anyone else on the planet works $6 million hard. There are only 24 hours in a day and so many good ideas. THEY DO NOT DESERVE THIS MUCH MORE THAN YOU. Have enough faith that you're also a hard worker that you'll let yourself cease believing they are worth so much more than you are.

In Japan there's a law that the highest-paid executive of a company cannot be paid more then 100x what the lowest-paid employee of that company makes. This keeps people like you from not only accepting but encouraging the growth of the disparity of wealth in their country.

There was also an article earlier this year describing how Apple engineers are underpaid compared to other big tech companies in the Valley. How about these stock options get distributed to them instead of the fat cats? I'm sure Apple engineers work pretty hard too. And they'd work harder if you gave them incentives to.

Thank goodness the House vote yesterday reflects the fact that people who support huge corporate bonuses are now in a small minority.

Salaries are negotiated between employers and employees or their representatives. Setting arbitrary caps on executive pay is just foolish. If it's in the stockholders interest and good people are very hard to find, then it needs to be flexible. Just because you or I cannot ever hope to achieve these lofty salary ranges doesn't mean they aren't valid.

[ectomort]

Originally Posted by SpamSandwich

Yeah, so what. There's nothing explosive about this post. Frankly, the way it's worded and the timing leads me to one conclusion. Stock influence or manipulation for AAPL shorts.

The grants were RSUs, not options, so there's no possibility of backdating.

[mezzkat]

Originally Posted by ktappe

Do you do a good job? Do you get millions? Didn't think so. So make me understand how they do thousands of times more work than you. (Hint that you apparently need: They don't.)

Now, I'm sure a few of you (who have already piped up) will say I think these executives don't work. BS. I know they work and work hard. But neither they nor anyone else on the planet works $6 million hard. There are only 24 hours in a day and so many good ideas. THEY DO NOT DESERVE THIS MUCH MORE THAN YOU. Have enough faith that you're also a hard worker that you'll let yourself cease believing they are worth so much more than you are.

In Japan there's a law that the highest-paid executive of a company cannot be paid more then 100x what the lowest-paid employee of that company makes. This keeps people like you from not only accepting but encouraging the growth of the disparity of wealth in their country.

There was also an article earlier this year describing how Apple engineers are underpaid compared to other big tech companies in the Valley. How about these stock options get distributed to them instead of the fat cats? I'm sure Apple engineers work pretty hard too. And they'd work harder if you gave them incentives to.

Thank goodness the House vote yesterday reflects the fact that people who support huge corporate bonuses are now in a small minority.

You need to understand the value of leadership. There are lots of people who have great ideas and work hard. They're not able to make lots of money because they don't have the skills required to bring a team together to execute the business. It's about consistently making good decisions that benefit the company. It's about leading organizations, galvanizing individuals who are vastly different, and steering everything toward a common goal with market-beating efficiency. Those skills are valuable because when times are tough, those leaders make sure the company survives and even makes a profit when other companies fail. Apple has been through really tough times, and released failed products (remember the Newton). But Jobs consistently takes risks that do pay off. He manages costs, invests in the future, inspires employees and consumers. And he's assembled an executive team that works well together to ensure his decisions are executed with cost efficiency. That's real value.

Someone else asked, where in the filing was Steve's stock payout? It probably doesn't exist. My guess is that Jobs and the board realize that he's so passionate about his company and its products, that he won't be motivated by more stock (he owns lots anyway). This company is his baby. He's nurtured it and grown it for decades. His team, however, will be motivated to do the right things for the company if their rewards are directly tied to company performance. Likewise, each of those execs must appropriately motivate their employees, and so on down the line. It's a free market. Apple software engineers can work for other companies with higher pay, if they want. If they're truly worth more, Apple will pay to keep them - not on an individual basis, but on average. And that's the beauty of the system. The grunt truly gets what the market can bear. If he wants to earn more, he must figure out how to make himself more valuable to the company. If companies paid employees more, just because they're able to, employees would loose motivation. Employees must be motivated to increase their value, then receive reward. The problem is that you can only have one CEO, CFO, COO, etc. So you have to pay to retain that one individual. You can afford to loose a few grunts due to slight market pressure. You can't afford to loose a great C-level exec.

[Bergermeister]

Why don't they take the money and invest it in better quality control and research so the can avoid the stupid errors of late: the iPhone charger recall, MobileMe release, iPhone OS 2.0, MacBook Air fan problems (version 1), others.

Show that you care about the customers first, not your pockets.

[bloggerblog]

The question is: how does one become an Apple executive?

[Marktrek]

Why is it that a company making money and can afford these kind of bonuses doesn't pay a dividend. Why do the stock holders allow this? I am glad that they are making a lot of money. Would they have quit if they had only gotten $2 million? Maybe there needs to be a new law that gives employees the same stock options as the executives. They are worth thousand of times more? Nonsense. No body would be making any money if sales people weren't selling proper product, if the Genius Bar wasn't solving problems, if phone techs weren't answering AppleCare questions, if software wasn't being written, hardware designed, etc., etc.. But only executives get the bonuses. Meanwhile it is based on stock price, not profits. So a year ago the options were worth more, now because the economy is down, it is worth less. The executives had nothing to do with any of that.

[Bregalad]

Originally Posted by Marktrek

Why is it that a company making money and can afford these kind of bonuses doesn't pay a dividend. Why do the stock holders allow this? I am glad that they are making a lot of money. Would they have quit if they had only gotten $2 million? Maybe there needs to be a new law that gives employees the same stock options as the executives. They are worth thousand of times more? Nonsense. No body would be making any money if sales people weren't selling proper product, if the Genius Bar wasn't solving problems, if phone techs weren't answering AppleCare questions, if software wasn't being written, hardware designed, etc., etc.. But only executives get the bonuses. Meanwhile it is based on stock price, not profits. So a year ago the options were worth more, now because the economy is down, it is worth less. The executives had nothing to do with any of that.

Because the majority of stock is held by large organizations.

The most fair way to compensate is on performance. If the company does well those who led it get lots, if things aren't going so well they don't get as much. Unfortunately this doesn't seem to be the way anyone is compensated these days. There are probably favorable tax benefits or some other good reason to award stock rather than a share of profits.

Awarding stock instead of cash only looks out of place because share price is not an accurate indicator of performance. Oh maybe it should be but that's not reality. The stock market is a game of speculation and manipulation. Whether this new restricted stock is worth anything 6 years from now depends less on the performance of the executives than it does on a group of people who spend all their time trying to influence stock prices for their own benefit.

It's really quite sad that a company that has been outperforming every other major tech company on the planet has lost almost half its value in the last 10 months while none of its underperforming competitors has suffered nearly as much. It's even more sad that ordinary people aren't going to be able to take advantage of this AAPL buying opportunity because we're too busy trying to pay the inflated price of food, fuel, etc. and hoping our bank isn't the next one to fail.

[PXT]

As a future switcher from MacroShaft to Apple products, I am perfectly happy for Apple's top management to receive these rewards and incentives.

I am happy to pay more for an Apple product, because the value I expect to have returned to me for better security, stability, ease of use, and grown-up prioritization of features such as Time Machine, rather than 'The Surface' far outweighs the price I pay on the day of purchase.

As someone who has over the last 25 years been a developer, management consultant, freelance consultant, and manager of hundreds of developers, I know that this quality comes from the top down.

So if Apple's top execs want to take $100 off me at the door, that's fine.
Because if I could have the consulting fees for the time I have spent on my Vista PC this year, then I could have bought a Macbook, and a time capsule, and a new car.

[G_Warren]

A number of people have complained about these handouts to the rich. However, bear in mind that since they don't really occur until 2012, if an Exec really underperforms in the next four years, he'll be kicked out and receive nothing. Sounds like a sensible deal to me. It also underlines to the market that Apple execs are sufficiently comfortable with the company's future performance to think it is a good idea to enter into these options now.

No-one seems to have mentioned that since Steve didn't receive any options, this hints that Steve doesn't intend to be at Apple in 2012. Of course, I am merely speculating, and there could be other explanations.

[DavidW]

Does anyone know whether Apple issued more AAPL shares for these grants. Or did Apple buy back AAPL shares in the open market at $105.26. Hopefully they bought back the shares with some of that 18 billion dollars they have in cash. Instead of diluting the shares that are already out there by issuing more shares.

And if you're complaining about the $122,000,000 in grants now, wait till it's vested. As an investor, I'm hoping that these grants will be worth over $500,000,000 by 2012.

[Techboy]

How well Apple has done the last few years is mainly due to their iPod approach that also help drive up their Mac sales. Give Steve Jobs credit for the direction but the rest of these guys don't worth that much. Sent them to Microsoft and see how well they perform there.

There is no end to greed. This is not about rewarding the most talented or best performance. "Rewarding" your "top players" millions of dollars at a time like this, can also be translated as telling the rest of your employees they don't worth much.

Let me put it this way, if I have to report to on of these "top" guys and do their dirty work, and knowing they will be receiving 8-digital reward in four years... I'll start looking for a new job because that stuff likely won't trickle down to people that actually does the work.

[photoeditor]

Further proof that American executive compensation is completely out of hand. Part of the problem is the way so much executive compensation is tax-deductible at the same time as the tax code penalizes companies for other forms of employee compensation, thereby encouraging companies to behavior in this rock-star worship mentality rather than building up the whole enterprise.

Japanese executives make less than 20 times their lowest paid employee. British ones, a little less than 30 times. American ones, 400 times. Are our execs really 10 to 20 times better than anyone else's? Baloney. Increasingly, they're not as good. Our companies are lagging foreign companies. Our MBA degrees, once the world's gold standard, have been falling behind for the past 20 years as MBAs in other countries broaden out from analysis to focus on actual management. Our tax code, once the model for the rest of the world, now simply rewards this boardroom dysfunction while penalizing developing and paying the mass of employees. We're all about analysis, nothing about managing people. We have a culture in which overpaid rock-star executives use verbal abuse, grand strategies, number crunching and reorganizations as substitutes for managing people

Does it reflect actual performance? When Bertrand Serlet, who has presided over an ever more buggy Apple OS for several years, gets the same grant as Jonathan Ive who is truly a unique talent or even Phil Schiller who brought us Mac vs PC, I don't think so. This is just the execs acting collectively as if they were a very exclusive labor union.

Lop a zero off the end of each grant, and you might have something approaching sanity.