Apple SVP Eddy Cue sells off $12.4M of vested stock, CEO Cook withholds shares

Posted:
in AAPL Investors edited January 2014
Filings with the U.S. Securities and Exchange Commission on Tuesday reveal Apple executives Tim Cook and Eddy Cue exercised stock options last week, though only Cue opted to sell a portion of his vested stock for a total of $12.4 million.

Cue Stock
Source: SEC


Apple's senior vice president of Internet Software and Services Eddy Cue acquired 50,000 restricted stock units last Saturday, and sold 24,580 shares at a price of $504.18 to net $12,392,700. The remaining 25,420 units were withheld at a price of $501.02 per share to satisfy the minimum statutory tax requirements on vested RSUs.

Cue's shares were part of a 100,000 unit award granted in September 2011, the second half of which is scheduled to vest in August 2014, assuming continued employment.

As for Cook, the chief executive had 72,877 RSUs converted on the same day and withheld the minimum tax requirements, which came out to 38,028 shares at $501.02, or over $19 million. He did not sell any shares in last week's transaction.

Cook still holds 87,316 common stock shares that, if sold today, would be worth nearly $42.7 million. In addition, another 840,000 RSUs are scheduled to vest in 100,000-unit chunks in 2016 and 2021. The remaining 640,000 will be split into eight annual installments of 80,000 units, the first slated to vest on Aug. 24, 2014.

Comments

  • Reply 1 of 19
    tylerk36tylerk36 Posts: 1,037member


    Sell all stock from all execs and give it all to the developers.  See what happens.

  • Reply 2 of 19
    fallenjtfallenjt Posts: 4,046member


    Executives dump stocks before the product announcement? Great!

  • Reply 3 of 19
    rogifanrogifan Posts: 10,669member
    I'll bet Ive is glad he doesn't have to disclose his stock grants and sales.
  • Reply 4 of 19
    dreyfus2dreyfus2 Posts: 1,072member

    Well, stock being part of a payment package is time-bombed. Receivers can't cash in before a specified date.

    Cue did sell once he was allowed to, Cook didn't.

    Lesson learned? Cook sees relevant revenues and profits ahead. Cue is somewhat stuck with negotiations with content providers... or simply has to settle his debt with that Chinese hooker everybody is talking about...

    Whatever... not really any news here.
  • Reply 5 of 19
    wovelwovel Posts: 956member
    dreyfus2 wrote: »
    Well, stock being part of a payment package is time-bombed. Receivers can't cash in before a specified date.

    Cue did sell once he was allowed to, Cook didn't.

    Lesson learned? Cook sees relevant revenues and profits ahead. Cue is somewhat stuck with negotiations with content providers... or simply has to settle his debt with that Chinese hooker everybody is talking about...

    Whatever... not really any news here.

    Maybe Eddie is going to MS :)
  • Reply 6 of 19
    Or maybe he just wanted some asset liquidity.
  • Reply 7 of 19
    mstonemstone Posts: 11,510member


    If he filed an extension, taxes are due in a little over a month, perhaps with some prepayment penalties. Time to pay up, better sell some shares.

  • Reply 8 of 19


    It's this simple… when these shares vest, you are liable for the taxes on them. If you don't have the cash on hand to cover it, it's necessary to sell off at least a portion of them to cover those taxes. Cue may have taken a bit of liquidity off the top, but he's essentially 'prepaying' the tax on the whole chunk by selling what he needs to in order to cover it. By hanging on to the rest, he's also showing that he clearly believes that stock is going to be a lot more valuable in the near future… I'm guessing he'd have preferred not to have to sell any of it.


     


    In Cook's case, he may have had the cash on hand to cover the taxes, and feels that holding onto the stock is a better investment than cashing them out for a tax payment.

  • Reply 9 of 19
    MacProMacPro Posts: 19,492member
    Or maybe he just wanted some asset liquidity.

    Exactly, he needs it to buy a top of the line Mac Pro in November ... :D
  • Reply 10 of 19

    Quote:

    Originally Posted by fallenjt View Post


    Executives dump stocks before the product announcement? Great!



     


    You're kidding, right? His stock vested on a schedule. That schedule has nothing to do with product release timing. When the stock vests, you need to pay some taxes. How do you afford that? If you have a few million $ on hand, perhaps you just cover it. Otherwise, you have to sell some of those newly vested shares to cover the tax bill. It's a common pattern in corporate executive circles: Vest -> Sell a portion roughly equal to the potential (prepaid) tax liability -> Sit on the rest.


     


    Get it?

  • Reply 11 of 19
    squeaksqueak Posts: 26member

    Quote:

    Originally Posted by tribalogical View Post


    It's this simple… when these shares vest, you are liable for the taxes on them. If you don't have the cash on hand to cover it, it's necessary to sell off at least a portion of them to cover those taxes. Cue may have taken a bit of liquidity off the top, but he's essentially 'prepaying' the tax on the whole chunk by selling what he needs to in order to cover it. By hanging on to the rest, he's also showing that he clearly believes that stock is going to be a lot more valuable in the near future… I'm guessing he'd have preferred not to have to sell any of it.


     


    In Cook's case, he may have had the cash on hand to cover the taxes, and feels that holding onto the stock is a better investment than cashing them out for a tax payment.



     


    Cue did not keep any. He sold half for liquidity, and the other half was withheld to submit to the IRS to cover the tax bill. The entire 50k share grant is now gone.

  • Reply 12 of 19
    drblankdrblank Posts: 3,383member

    Quote:

    Originally Posted by fallenjt View Post


    Executives dump stocks before the product announcement? Great!



    Sometimes, they kind of have to. If they plan on staying longer, they always get more...  Maybe Eddie wants to buy the next new Ferrari that gets produced.....  These guys don't make much off their salary.  

  • Reply 13 of 19
    Exactly, he needs it to buy a top of the line Mac Pro in November ... :D

    Or a Ferrari Enzo!
  • Reply 14 of 19


    $12.4 million hits the streets... Maybe some of that will slosh halfway across the country to where I am... 

  • Reply 15 of 19
    I wish I could become a millionaire by turning iTunes into a dung pile.
  • Reply 16 of 19

    Originally Posted by graxspoo View Post


    I wish I could become a millionaire by turning iTunes into a dung pile.


     


    I wish I had a clue what you were talking about.

  • Reply 17 of 19
    I wish I had a clue what you were talking about.
    When animals make...oh, wait...
  • Reply 18 of 19
    Now I understand the tax implications, well it's probably an AAPL buying opportunity, scared off a few numpties... now theres 3% to regain in the next few days.
  • Reply 19 of 19
    tkell31tkell31 Posts: 216member


    Or in other words, Cook is finally forced to hold some shares since he's dumped them every step of the way.  If they are using shareholder equity to buyback shares they really should be forced to hold shares for at least a year past the vesting date otherwise it really looks like they are just using the buyback to dump shares at inflated prices.

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