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New Apple retail chief John Browett receives $61M in stock rights

post #1 of 51
Thread Starter 
Apple's new senior vice president of retail, John Browett, has officially begun work at his new company, and was issued about $61 million worth of restricted stock.

Browett began his new position at Apple last week on April 20, according to a new filing with the U.S. Securities and Exchange Commission. The filing, first noted on Wednesday by MacRumors, reveals that Browett received 100,00 restricted stock units on Friday worth about $61 million.

The first 5,000 shares issued to Browett will fully vest on Oct. 20 of this year, and an additional 15,000 units will vest after his first year with Apple. His remaining shares will continue to vest in the amount of 20,000 each year on April 20.

It was first revealed in January that Apple had hired Browett as the company's new senior vice president of retail. He was previously the chief executive of European retailer Dixons, and he holds a degree in Natrual Sciences from Cambridge University and an MBA from Wharton Business School.

Browett replaced Ron Johnson, who was instrumental in the formation of Apple's retail business nearly 11 years ago. Johnson left the company last fall to become CEO of JC Penney.

Browett


Some pundits questioned Apple's hiring of Browett, noting that he is an outsider to the company's operations. But Apple Chief Executive Tim Cook was said to have defended the hire in an e-mail, noting that he talked to many people and Browett was "the best by far."
post #2 of 51

Beats Dixons

post #3 of 51

Not problem with this except it should only be offered after a two year period to prove he is up to the job.

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post #4 of 51

browett-120425.jpg

 

 

 

Hopefully, he will use some of the money to find a new barber.

post #5 of 51

Seems excessive and unnecessary. His predecessor would of probably deserved it but he built the operation from the ground up and contributed heavily to share-holder value. This guy is coming in and pretty much avoiding hitting an ice burg which isn't an extremely hard skill in extremely limited supply. 

post #6 of 51

I hope his fellow Brit Jony Ive is this well compensated.  At least he has a track record at Apple that would deserve it.  What track record does Browett have?  I have a hard time believing Apple would need to throw that much $$ at someone in order to get them to come work for them.
 

post #7 of 51

Have to agree with the other posters: $61MM is nuts.

post #8 of 51

I had the urge to say that natrual is misspelt, but it's English. Surrrrrre does look funny on this side of the pond, though! :B

post #9 of 51
3 million dollar for 4 months work he didn't even do yet seem excessive.
His normal salary should be sufficient.
A plus is that it will be difficult to bribe him, with this kind of money.

J.
post #10 of 51

 

Quote:
Originally Posted by malax View Post

Have to agree with the other posters: $61MM is nuts.

 

It is nuts and it is wrong on every level (except for him, of course). If he screws up, under performs or has problems with the Apple culture he could be gone in no time. This kind of thing happens all the time. Top executives are in a position to negotiate these terms and basically insure themselves against failure. I think the message it sends is basically a big **** You to everybody else and I wish government would step in and regulate. 

 

Edit: I notice that my Fu@k You (spelled the proper way) was modified as above by AI. Really AI? We need to be language policed? Oh, and while I am at it, this new forum update really sucks on the iPhone. The last one did, too, but this one is even worse. Hrmph!

post #11 of 51

What exactly is he being rewarded for? He's done nothing yet to earn this level of reward. I agree with those saying that he should have been in the job for at least 2 years before getting any shares.

post #12 of 51
Quote:
Originally Posted by taxman View Post
…I wish government would step in and regulate. 

 

For what purpose? This 'government should step in and regulate' thing is always what I agree with over 'government should step in and take over', but regulation for its own sake makes no sense.

 

If the guy sucks, he sucks. He'll be fired and replaced and the money will be dealt with.

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Originally Posted by Marvin

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post #13 of 51

 

Quote:
Originally Posted by AppleInsider View Post

...reveals that Browett received 100,00 restricted stock units on Friday worth about $61 million.
 

 

 

How many shares?

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post #14 of 51

 

Quote:
Originally Posted by Tallest Skil View Post

 

For what purpose? This 'government should step in and regulate' thing is always what I agree with over 'government should step in and take over', but regulation for its own sake makes no sense.

 

If the guy sucks, he sucks. He'll be fired and replaced and the money will be dealt with.

 

Dealt into his checking account at the expense of shareholders who hired him to do a job he would of failed at. The slow trend towards stock based compensation has been a disaster and should be reigned in. 

 

What exactly is he going to do besides open new stores? Is there a new major remodel on the horizon or system wide change? They are ruling the world and have no need to change the formula. So, is he a $61mil place holder?

post #15 of 51

 

Quote:
Originally Posted by malax View Post

Have to agree with the other posters: $61MM is nuts.

 

It is spread over a number of years so it is based on performance. If he gets canned he doesn't get all the money.

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post #16 of 51

 

Quote:
Originally Posted by mstone View Post

 

It is spread over a number of years so it is based on performance. If he gets canned he doesn't get all the money.

His remaining shares will continue to vest in the amount of 20,000 each year on April 20.

 

It's less than 5 years till he gets all of it, not really that long.

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post #17 of 51

 

Quote:
Originally Posted by mstone View Post

 

 

It is spread over a number of years so it is based on performance. If he gets canned he doesn't get all the money.

 

No, but even if he does get all the money, what will he of done that is worth $61 million. Regardless of one's opinions on regulation vs. deregulation, free markets, fair trade vs. free trade, etc., etc.... does anyone really think this guy is in a position within the company that will add $61 million dollars in value to it? 

post #18 of 51
Quote:
Originally Posted by TheDisco View Post
What exactly is he going to do besides open new stores? Is there a new major remodel on the horizon or system wide change? They are ruling the world and have no need to change the formula.

 

And it's that kind of thinking that is exactly un-Apple.

 

If you don't like how much money he's getting, think of it as a research grant. He's being paid to be there, learn everything about it how it works now, and research what made it work and why. When the time comes that a change DOES need to be made, he'll be set and it'll be a piece of cake, provided he has actually done his job.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #19 of 51

 

Quote:
Originally Posted by Tallest Skil View Post

 

And it's that kind of thinking that is exactly un-Apple.

 

If you don't like how much money he's getting, think of it as a research grant. He's being paid to be there, learn everything about it how it works now, and research what made it work and why. When the time comes that a change DOES need to be made, he'll be set and it'll be a piece of cake, provided he has actually done his job.

 

When it comes to their retail model it is VERY Apple. Its not the same game as the hardware side. There hasn't been a major change in Apple stores beyond the POS systems since they opened over a decade ago. Do you think Apple is really going to be rocking the boat in the next five years by the time his shares vest? If so, I have a bridge to nowhere to sell you...

post #20 of 51

 

Quote:
Originally Posted by paxman View Post

 

 

It is nuts and it is wrong on every level (except for him, of course). If he screws up, under performs or has problems with the Apple culture he could be gone in no time. This kind of thing happens all the time. Top executives are in a position to negotiate these terms and basically insure themselves against failure. I think the message it sends is basically a big **** You to everybody else and I wish government would step in and regulate. 

 

Edit: I notice that my Fu@k You (spelled the proper way) was modified as above by AI. Really AI? We need to be language policed? Oh, and while I am at it, this new forum update really sucks on the iPhone. The last one did, too, but this one is even worse. Hrmph!

 


Wow! You want the government to step in and regulate Apple's hiring practices, and then you complain when AI steps in and regulates your post?  Do you see the irony here?

post #21 of 51

 

Quote:
Originally Posted by Tallest Skil View Post

 

And it's that kind of thinking that is exactly un-Apple.

 

If you don't like how much money he's getting, think of it as a research grant. He's being paid to be there, learn everything about it how it works now, and research what made it work and why. When the time comes that a change DOES need to be made, he'll be set and it'll be a piece of cake, provided he has actually done his job.

 

So they're giving someone $60M to learn about how Apple's retail model works?  Hey they could have called me.  I'd have taken that 'research grant' for a lot less than $60M. :-D

post #22 of 51

 

Quote:
Originally Posted by TheDisco View Post

 

 

does anyone really think this guy is in a position within the company that will add $61 million dollars in value to it? 

 

It appears the Tim Cook thinks that, and I believe he is in a much better position to make that INFORMED decision (and I am an APPL shareholder).

post #23 of 51

All he has to do is open up stores across China and he'll be a hero. What a great gig...Will he only pay a 15% tax rate when he sells his stock?

post #24 of 51

 

Quote:
Originally Posted by beckman View Post

 

 

It appears the Tim Cook thinks that, and I believe he is in a much better position to make that INFORMED decision (and I am an APPL shareholder).

 

As an Apple share holder you should be asking tougher questions rather then blind allegiance to a CEO. Keeps 'em honest that way...

post #25 of 51
Quote:
Originally Posted by TheDisco View Post
When it comes to their retail model it is VERY Apple. Its not the same game as the hardware side. There hasn't been a major change in Apple stores beyond the POS systems since they opened over a decade ago. Do you think Apple is really going to be rocking the boat in the next five years by the time his shares vest? If so, I have a bridge to nowhere to sell you...

 

Do you think you can honestly tell me what five years from now will be like? Five years ago today we were still all waiting with bated breath for the first iPhone. The Apple TV had just been given a lackluster reception, and the thought of unibody computers (even the unibody iMac) wasn't even in anyone's mind.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
Reply

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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post #26 of 51

 

Quote:
Originally Posted by Tallest Skil View Post

 

Do you think you can honestly tell me what five years from now will be like? Five years ago today we were still all waiting with bated breath for the first iPhone. The Apple TV had just been given a lackluster reception, and the thought of unibody computers (even the unibody iMac) wasn't even in anyone's mind.

 

Notice that pattern in everything you mentioned? ALL hardware. NOTHING retail. 

 

EDIT: I'm very bullish on Apple's hardware future over the next five years. Even though it is hard to see where they can go in the immediate future that will be as dramatic as the iPhone and iPad, there are those much smarter then me hard at work on that making something I never knew I would "need." I just do not see any change in retail strategy in the next five years that justify a pay-off of this magnitude. Ten years out I'd whole-heartedly agree with you, but in the time this guys shares vest and he can jump ship, with $61mil in his pocket... not so much. Its a big expense for a guy taking over an operation that can mostly run on auto-pilot at the moment. 


Edited by TheDisco - 4/25/12 at 12:05pm
post #27 of 51

 

Quote:
Originally Posted by TheDisco View Post

 

 

As an Apple share holder you should be asking tougher questions rather then blind allegiance to a CEO. Keeps 'em honest that way...

 

@TheDisco,  I am so impressed by your cutting insight and business savvy.  You are 100% sure that the new hire is a waste of money, and you are 100% sure I have blind allegiance to the Apple CEO.  Must be nice living with such a great mind...

post #28 of 51

Golden handcuffs, but we don't even know if the guy is in fact golden yet.  As for the barber comment it was funny, but if he can do the job he could have a mo-hawk for all I care.  I'm a share holder.  Seems a bit excessive.

post #29 of 51
Quote:
Originally Posted by TheDisco View Post
Notice that pattern in everything you mentioned? ALL hardware. NOTHING retail. 

 

Go ahead and continue to believe that thinking doesn't translate.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
Reply

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
Reply
post #30 of 51

Most important thing they can do is to keep hiring top-notch people and keep the stores feeling like Apple clubhouses instead of stores.

 

As an aside, I can't wait to see what the new Soho store looks like here in NYC. I have a feeling they're going to be making an even bigger deal out of the auditorium. 

post #31 of 51

 

Quote:
Originally Posted by syracuse View Post

All he has to do is open up stores across China and he'll be a hero. What a great gig...Will he only pay a 15% tax rate when he sells his stock?

 

RSUs incur a tax liability which is treated as ordinary income when they become fully vested. The amount owed is based on the difference between the purchase price and the fair market value at the time when the vesting is complete. What typically happens is a partial sale of the newly vested RSUs to cover the taxes; the owner can keep the rest of the shares and any additional gains in value would be taxed as capital gains (short-term <1 yr., long-term >1 yr.).

 

There's also the Section 83(b) election, which allows the individual to declare the value at time of the grant, then pay the difference between the grant date and the exercise date as capital gains. That's sometimes a risk if the employee is no longer employed with the company at the time of the vesting date.

 

www.investopedia.com/articles/tax/09/restricted-stock-tax.asp

http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

 

Oh, and it's likely that John Browett is not in the 15% tax bracket. Most likely he is somewhere in the 28% or upwards. Thus, regardless of income or short-term capital gains, he will probably owe the IRS 28% once the RSUs are issued.


Edited by cvaldes1831 - 4/25/12 at 12:19pm
post #32 of 51

What were people's impressions of Tim Cook when Apple hired him from Compaq?  How did Cook or anybody else outside of Apple ever get hired?  Isn't Apple supposed to be a self-sustaining company that breeds its own employees?


Edited by Haggar - 4/25/12 at 12:19pm
post #33 of 51

 

Quote:
Originally Posted by Haggar View Post

What were people's impressions of Tim Cook when Apple hired him from Compaq?  How did Cook or anybody else outside of Apple ever get hired?  Isn't Apple supposed to be a self-sustaining company that breeds its own employees?

 

There's an app for that ;)

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post #34 of 51

SJ was careful with compensation, starting with his own compensation.  After he died, management seems to have gone wild.  They issued a bunch of options to themselves, a lot of it excessive.  Now this guy has joined options party.  To top if off, Apple is going to spend $10B to buy back a lot of these options/shares over 3 years.  Why? So the stock price is boosted and to make their options valuable.  Why do they have to do the buyback?  If the talent was worth the compensation, then the stock price should go up!  

 

Apple is not the worst offender.  I would say QCOM, ORCL got to the top that list among the large cap techs.  

post #35 of 51
Quote:
Originally Posted by TheDisco View Post

 

Quote:
Originally Posted by beckman View Post

 

 

It appears the Tim Cook thinks that, and I believe he is in a much better position to make that INFORMED decision (and I am an APPL shareholder).

 

As an Apple share holder you should be asking tougher questions rather then blind allegiance to a CEO. Keeps 'em honest that way...


As an Apple shareholder, he should know the ticker symbol....
post #36 of 51
Quote:
Originally Posted by syracuse View Post

All he has to do is open up stores across China and he'll be a hero. What a great gig...Will he only pay a 15% tax rate when he sells his stock?


NO.

Tim Cook and others had to set-aside a hefty chunk for taxes... I think it was more than 33%... look for the recent appleinsider article on the executive stock options exercised by Tim Cook and others at Apple...
post #37 of 51

I think the guy should have to prove himself before he's given a huge stock grant.  What 'innovation' needs to be brought to Apple retail right now?
 

post #38 of 51
Quote:
Originally Posted by paxman View Post

... I notice that my Fu@k You (spelled the proper way) was modified as above by AI. Really AI? We need to be language policed? Oh, and while I am at it, this new forum update really sucks on the iPhone. The last one did, too, but this one is even worse. Hrmph!

If AI made a change in your original comment it should be made clear (by AI) that the comment is changed and in what way.
Swearing isn't nice to read but I think it's the responsibility of the writer not AI.
It's maybe needed to step in if someone is promoting Mein Kampf or something similar but otherwise it's wrong to do so.
And yes AI is a lot slower on the iPhone and iPod and not completely compatible with Safari on iOS.

J.
post #39 of 51

Note to the folks saying he has done anything:

 

RSUs aren't exactly like Employee Stock Purchase Plans. There are typically performance clauses tied to the RSUs and management (or probably the board) would review whether or not he met those terms adequately before voting to issue the vested shares. There is likely a clause that allows the board to reduce the number of issued shares if the performance clauses were partially, but not fully met.

 

For Broward, one of the criteria would probably be revenue growth in store open at least one year. A future RSU grant would probably be tied to successful store openings under his tenure as well as increasing revenue from those stores after they have been open for a couple of years. Gross margin, customer satisfaction, a cap on operating costs are probably other ways he will be judged.

 

As I touched upon earlier, boards can decide to issue part of the RSUs. Example: Microsoft's board withheld some of Ballmer's annual bonus due to lack of execution in the mobile market.

 

It's not Apple that does this. This is very commonplace.


Edited by cvaldes1831 - 4/25/12 at 1:37pm
post #40 of 51
Quote:
Originally Posted by jnjnjn View Post
If AI made a change in your original comment it should be made clear (by AI) that the comment is changed and in what way.
Swearing isn't nice to read but I think it's the responsibility of the writer not AI.

 

Huddler automatically censors swearing. We didn't do anything.

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
Reply

Originally Posted by Marvin

The only thing more insecure than Android’s OS is its userbase.
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