Cook incentivizes his 1M restricted stock unit payout as top brass net $86.5M in share selloff

Posted:
in General Discussion edited August 2014
A number of top Apple executives, including CEO Tim Cook and CFO Peter Oppenheimer, on Friday sold off recently vested restricted stock units worth a total of nearly $86.5 million, while Cook asked the board to incentivize his award.

Cook RSU
Source: SEC


According to filings made public by the U.S. Securities and Exchange Commission, six executives sold off hundreds of thousands of restricted stock units (RSUs) which vested on Friday.

Apple CEO Tim Cook, COO Peter Oppenheimer, marketing head Phil Schiller, SVP of Technologies Bob Mansfield, legal chief Bruce Sewell and SVP of Operations Jeff Williams sold common stock worth $86.45 million

Cook made out with the most after exercising 41,391 shares at a price of $413.50, netting him over $17.1 million. Apple also agreed to modify the chief executive's one-million RSU package, worth nearly $413 million at today's AAPL price, adding performance provisions to the stock that will vest in increments over the next eight years. In return, a portion of the RSUs will vest sooner.
Under the adopted modification, Mr. Cook will forfeit a portion of the award if Apple Inc. does not achieve certain performance criteria. As modified, assuming continued employment through the applicable vesting date and satisfaction of applicable performance-based criteria, the one million restricted stock units subject to the award vest as follows: 100,000 restricted stock units vest on August 24, 2016; 100,000 restricted stock units vest on August 24, 2021; the balance of 800,000 restricted stock units is separated into ten equal tranches of 80,000 restricted stock units each that vest over the ten-year life of the award. This transaction represents the settlement, pursuant to the terms of the modified award, of 80,000 restricted stock units that vested upon the modification of the award on June 21, 2013. Each remaining tranche of 80,000 restricted stock units vests annually commencing August 24, 2013, assuming continued employment through the applicable vesting date and, with respect to a portion of each tranche, satisfaction of applicable performance-based criteria.
In an 8K filing posted to Apple's website, the company noted that Cook's stock will vest based on AAPL performance. If Apple's total shareholder return is within the top third of S&P 500 companies, the RSUs for that year will vest in full. If performance is in the middle third or lower third, the RSUs set to vest in that year will be will be reduced by 25 percent and 50 percent, respectively.

As for the total breakdown of common stock sold today, the list is as follows:
  • Tim Cook: $17,115,178.50
  • Phil Schiller: $16,287,540
  • Jeff Williams: $15,787,843.50
  • Peter Oppenheimer: $15,641,878
  • Bruce Sewell: $15,641,878
  • Bob Mansfield : $5,981,277.50
The shares sold on Friday were all from RSUs awarded in 2011, which vested on Friday. For most, the other half will vest on March 21, 2016, contingent on performance and employment by that date.
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Comments

  • Reply 1 of 78
    MacProMacPro Posts: 18,148member
    Bet they wish it was 700+ again ...
  • Reply 2 of 78
    drblankdrblank Posts: 3,383member

    Quote:

    Originally Posted by digitalclips View Post



    Bet they wish it was 700+ again ...






    I don't think it matters once you get a certain amount of money.  It's like the difference between being rich and being richer.  For normal people, it's the difference between having $500 and having $1000.  Sure, we'd like it, but it's not going to make our lives twice as good.

  • Reply 3 of 78
    mj webmj web Posts: 918member
    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.
  • Reply 4 of 78

    Quote:

    Originally Posted by MJ Web View Post



    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.


     


    And yet they keep breaking profit records every quarter. Go figure.

  • Reply 5 of 78
    tallest skiltallest skil Posts: 43,399member
    mj web wrote: »
    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.

    /s
  • Reply 6 of 78
    adamcadamc Posts: 568member
    mj web wrote: »
    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.

    You reckon you can do better.

    Why not talk to Apple board and ask them for his job.
  • Reply 7 of 78
    decondodecondo Posts: 21member


    It's all absurd!

  • Reply 8 of 78
    poochpooch Posts: 768member
    mj web wrote: »
    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.

    gee, i don't suppose you happened to notice what happened to the market in general, eh?
  • Reply 9 of 78
    jungmarkjungmark Posts: 6,664member
    mj web wrote: »
    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.

    *cough* idiot *cough*
  • Reply 10 of 78
    rkevwillrkevwill Posts: 224member


    Apparently some of the commenters are not aware, that when deferred stock and options become vested, you owe taxes immediately. Many executives sell stock in a cashless exercise, to pay that tax liability. They may indeed, keep the rest of the shares for future use.

  • Reply 11 of 78
    macologistmacologist Posts: 264member
    Speculation....
  • Reply 12 of 78
    tbelltbell Posts: 3,146member
    rkevwill wrote: »
    Apparently some of the commenters are not aware, that when deferred stock and options become vested, you owe taxes immediately. Many executives sell stock in a cashless exercise, to pay that tax liability. They may indeed, keep the rest of the shares for future use.

    Jobs sold a ton of his Apple shares to pay the taxes on his Disney shares. Often the sale date is set for the vesting date for that reason. They also have to pay the taxes on the dividend.
  • Reply 13 of 78
    slurpyslurpy Posts: 5,116member

    Quote:

    Originally Posted by MJ Web View Post



    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.


     


    No other CEO of any major company would do what Tim Cook just did, as by his request, his incentivization will only have a downside component, not an upside. That's called being a leader, and believing in your company. Not something someone like you would understand, with your myopic view of FIRE COOK NOW mentality. Apple has yet to release a failed product under Cook, or something that doesn't smash all previous records, or something that doesnt have ultra high satisfaction ratings, or doesn't have the highest reviews in the industry, etc. No doubt you have no idea who you would want to replace Cook in your fantasy scenario, because that would require you to think 10 seconds into the future and 2 feet ahead of your nose. 

  • Reply 14 of 78
    phone-ui-guyphone-ui-guy Posts: 1,018member
    macologist wrote: »
    My concern is that people who don't have Apple's best interest in mind will interpret this as the top executives not having enough faith in Apple's future and will use it as an excuse to speculate, and drive AAPL stock price down further! They would be saying something like, if they know that AAPL price is going up why would they want to sell it right now, when it already took a hit lately. Why wouldn't they wait to sell it later at a higher price? There must be a good explanation for all this, aside from Comment 11! I just don't know what it is.

    Comment 11 is the answer with one clarification. It isn't about how execs do it, it is how RSUs work. When they vest, they (the company) must sell some to cover the taxes. The brokerage firm handeling their employee stock plan will do it all. It is how they do the federal withholding on the gain. So some % gets sold and then you own the rest of the vested shares and can hold or sell them. So the real question is if they held the rest. You can lookup their positions online and figure it out since they are officers of the corporation.

    I'm not a tax or stock expert, but I get RSU grants from my employer.
  • Reply 15 of 78
    phone-ui-guyphone-ui-guy Posts: 1,018member
    tbell wrote: »
    rkevwill wrote: »
    Apparently some of the commenters are not aware, that when deferred stock and options become vested, you owe taxes immediately. Many executives sell stock in a cashless exercise, to pay that tax liability. They may indeed, keep the rest of the shares for future use.

    Jobs sold a ton of his Apple shares to pay the taxes on his Disney shares. Often the sale date is set for the vesting date for that reason. They also have to pay the taxes on the dividend.

    This strategy is referred to as net settlement or net share settlement where you sell some options to pay the taxes and retain the net gain as stock. RSUs do this by default for everyone.
  • Reply 16 of 78
    flaneurflaneur Posts: 4,509member
    mj web wrote: »
    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.

    Remember this guy?

    He's the one who said "Tim Cook is so full of shit he doesn't even know it."

    That was when Cook said Apple wasn't going to trade screen quality for screen size.

    Mr. Web exhibits a textbook case of not getting it. He doesn't even know he doesn't get it.
  • Reply 17 of 78
    I certainly hope Jony Ive has some stock, although I suppose he's not a high enough executive to require disclosure. A little surprising, that ...

    D
  • Reply 18 of 78
    enatureenature Posts: 77member

    Quote:

    Originally Posted by MJ Web View Post



    With AAPL share plummeting 10% in 2 days from historic lows during a stock buyback period, Cook obviously believes AAPL shares are worth less under his cockeyed misguided leadership.



     


    Cook never had guts to increase iPhone's screen to a size that would make it easy to use for the majority.


    Cook failed to make iCloud reliable.


    Cook is a spreadsheet master who has no understanding of products.


    Cook failed to revitalize iOS.


     


    Did you see the last Keynote? Shameful DISASTER! Craig Federighi introduced "swipe for the control pannel" and "moving photo backgrounds" like something radically new. Can you imagine Steve Jobs presenting this old shit that has been on Android for months if not years? Or... Flat Design? Have Apple execs ever played with Windows 8?


    Steve Jobs would fire people on the spot rather than put this Apple mockery on the worldwide display.


     


    Are Apple Execs living in some kind of bubble and do not see where the world, the competitors, and consumer trends are? It used to be that Apple defined consumer trends, now Apple desperately tries to catch up and fails.


    But who cares? As AAPL price continues to melt, Cook zealots will keep singing praises to this inept and gutless CEO.

  • Reply 19 of 78
    v5vv5v Posts: 1,357member

    Quote:

    Originally Posted by Slurpy View Post


    [...] Apple has yet to release a failed product under Cook, or something that doesn't smash all previous records



     


    Not bashing Cook, just picking a nit: The Retina MBP has not broken any records. I don't know if I'd call it a "failed" product but I wouldn't consider it a smashing success either. Hasn't adoption of this iteration been considerably slower than previous versions?

  • Reply 20 of 78
    v5vv5v Posts: 1,357member

    Quote:

    Originally Posted by Flaneur View Post





    Remember this guy?



    He's the one who said "Tim Cook is so full of shit he doesn't even know it."



    That was when Cook said Apple wasn't going to trade screen quality for screen size.



    Mr. Web exhibits a textbook case of not getting it. He doesn't even know he doesn't get it.


     


    With due respect, I believe he actually DOES get it. He knows, as do you and I, that Mr. Cook's comments on the subject were pure, unadulterated bullshit. Complete nonsense. His own products demonstrate as much.


     


    I do not perceive any benefit to having someone other than Cook at the helm, but neither do I assume he's got some super-secret-power insight that allows him to see "truths" that are contradicted by what is clearly evident to anyone. He might tell incredible stories about how his invisible robes contain secrets about what's best the common serf, but the truth is that sometimes the Emperor really *IS* naked.


     


    EVERY leader does it sometimes. Recognizing bullshit when you hear it is part of being a critical consumer. Recognizing that it won't bring the company to ruin is part of being a critical shareholder.

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