So if he sold 990k shares at ~$106/share, where did the $35.8 million figure come from? The total value I'm calculating is over $100M. No way he paid over 70% in taxes, as these should be considered Long Term Capital Gains, and only taxed at a flat rate of 20%...
For tax purposes such RSUs are treated as ordinary income based on their market value when they vest (or when the awardee gains effective control over them). If the recipient keeps them any appreciation (of depreciation) from there is treated as capital gains (or loses). So Mr. Cook has to pay income taxes on the value of this stock award as though he was paid its value in cash.
As for where the $35.8 million figure comes from: Mr. Cook didn't sell 990k shares, he sold 334k shares. The other approximately 656k shares were withheld by Apple to satisfy tax withholding requirements. Those approximately 656k shares represent about 52% of the shares, 1,260k, that vested for Mr. Cook on Wednesday. Of the remaining approximately 604k, he sold 334k.
So... Mr. Cook received around $136 million in stock on Wednesday. Around $71 million worth of it was withheld for tax purposes (though he may end up effectively paying a different amount). Then on Thursday and Friday around $36 million worth was sold (at a slight loss relative to the stock's valuation for tax purposes).
He's doing pretty well. I still say he'll be entering politics as the next part of his career path.
An interesting option, but not one that I think he'll take.
Think about it. He's having fun, even if there are hard challenges every day. There's a lot he can do to improve many things for a lot of people.
Even if he ran for the Senate, he'd be in a club of a hundred whose main activity is fighting and posturing. Not a fun place to be.
Interestingly, Al Franken has done well there. I guess his earlier career positioned him well for this !
What does an individual actually do with $36 million? Google says his net worth is $785 million. Does Cook have a partner, significant other, husband? Is he a loner? He has two brothers. Does he give it away or bury it in the back yard? We really don’t know very much about him do we.
He stated he was going to give most of it away during his lifetime.
What does an individual actually do with $36 million? Google says his net worth is $785 million. ...
I think a good investor continues to put their capital out there in smart investments to keep the system moving and lubed. Money makes money. As far as spending it personally, I think he's well past that or at least should be. It would be destructive if you tried.
For 'after he's gone', I think mega millionaires are doing things like invest in the Gates foundation and such. Bill Gates and Warren Buffet have pushed huge sums of money there. Neither plans to pass the bulk of their wealth to their children.
What does an individual actually do with $36 million? Google says his net worth is $785 million. ...
I think a good investor continues to put their capital out there in smart investments to keep the system moving and lubed. Money makes money. As far as spending it personally, I think he's well past that or at least should be. It would be destructive if you tried.
For 'after he's gone', I think mega millionaires are doing things like invest in the Gates foundation and such. Bill Gates and Warren Buffet have pushed huge sums of money there. Neither plans to pass the bulk of their wealth to their children.
If celebrities do it, I don't see why the CEO of Apple wouldn't also invest in companies he hears about.
So if he sold 990k shares at ~$106/share, where did the $35.8 million figure come from? The total value I'm calculating is over $100M. No way he paid over 70% in taxes, as these should be considered Long Term Capital Gains, and only taxed at a flat rate of 20%...
These are options. Cook buys the stock at one price set back when the options were initiated and sells them at current price. The difference is profit around $36M.
With options, you have to buy them when they mature. No one really ever has the cash on hand to pay for them so you typically sell a portion to buy all the remainder. You also sell enough to cover the tax that will be levied.
Tim cook should just retire after leaving Apple. Live the good live. OTOH why would he leave Apple. Going into Politics is Stupid, just like giving away all of his money.
Must not be anything good in the pipeline, or there'd be reason to hold onto it.
It's more like a pre-planned sale. The timing was determined long ago.
It is more than pre-planned. RSU are sold on the vesting date to pay the tax liability on the total value of the vest RCU amount. Simple example, if you have a 100 RSU vest today and they are worth $1000 at today's market price and your tax bracket is 20% you own the government $200 today and they must be paid on the day the shares vest whether you sell the entire 100 share or want to hand on to them. So Apple will automatically sell 20 share or $200 to pay the tax man. In Cook's case we do not know if the $38M is the tax bill or total vested amount including the tax bill. Considering Cook is in the 39% tax bracket (these are not consider capital gains and taxes at the lower %, they are consider income) I suspect this is just the tax bill being paid.
Since most people on here never owned RCU they would number understand this.
He's doing pretty well. I still say he'll be entering politics as the next part of his career path.
I don't see a career that says he is driven to seek power or enjoys the political game. Everything he's done along those lines happened because of things he'd wish hadn't happened. Being CEO? He'd rather Steve Jobs was still alive. Anti-discrimination? He'd rather there was no discrimination. Fighting the FBI over the encryption on a terrorist's iPhone? He'd rather that hadn't happened.
At Apple he can do what he thinks is right and win. In politics he can do what he thinks is right and lose. There may be a lot of people who try to persuade him to go into politics but I suspect he'd need a lot of persuading. I think he wouldn't do it if it's not something he needs to do.
He's doing pretty well. I still say he'll be entering politics as the next part of his career path.
I don't see a career that says he is driven to seek power or enjoys the political game. Everything he's done along those lines happened because of things he'd wish hadn't happened. Being CEO? He'd rather Steve Jobs was still alive. Anti-discrimination? He'd rather there was no discrimination. Fighting the FBI over the encryption on a terrorist's iPhone? He'd rather that hadn't happened.
At Apple he can do what he thinks is right and win. In politics he can do what he thinks is right and lose. There may be a lot of people who try to persuade him to go into politics but I suspect he'd need a lot of persuading. I think he wouldn't do it if it's not something he needs to do.
I see it as completely in his line of sight. Bad political policies happen because other people are in Washington making those decisions, all of which have repercussions they ignore.
So if he sold 990k shares at ~$106/share, where did the $35.8 million figure come from? The total value I'm calculating is over $100M. No way he paid over 70% in taxes, as these should be considered Long Term Capital Gains, and only taxed at a flat rate of 20%...
These are options. Cook buys the stock at one price set back when the options were initiated and sells them at current price. The difference is profit around $36M.
With options, you have to buy them when they mature. No one really ever has the cash on hand to pay for them so you typically sell a portion to buy all the remainder. You also sell enough to cover the tax that will be levied.
These are not options, they are Restricted Stock Units. The awardee gets the specified number of shares on a specified date and, in some cases, if specified performance criteria are met. They don't have to buy the shares. All Apple employees - not just upper management - can now get RSUs if they remain with Apple long enough, rather than just receiving stock options or being able to buy shares at a discount through an employee purchase plan.
The $36 million or so was the value of the 334,000 shares that Mr. Cook sold, not taking into account the more than 600,000 that were withheld for tax purposes.
Must not be anything good in the pipeline, or there'd be reason to hold onto it.
It's more like a pre-planned sale. The timing was determined long ago.
It is more than pre-planned. RSU are sold on the vesting date to pay the tax liability on the total value of the vest RCU amount. Simple example, if you have a 100 RSU vest today and they are worth $1000 at today's market price and your tax bracket is 20% you own the government $200 today and they must be paid on the day the shares vest whether you sell the entire 100 share or want to hand on to them. So Apple will automatically sell 20 share or $200 to pay the tax man. In Cook's case we do not know if the $38M is the tax bill or total vested amount including the tax bill. Considering Cook is in the 39% tax bracket (these are not consider capital gains and taxes at the lower %, they are consider income) I suspect this is just the tax bill being paid.
Since most people on here never owned RCU they would number understand this.
Yeah, Apple typically withholds a portion of the shares for tax purposes when they vest. In Mr. Cook's case that portion has typically been a little more than 50%, he has California taxes in addition to federal taxes. In some cases the SEC filings for him have indicated that he made additional cash payments for estimated taxes because the amount of stock required to be withheld might not be enough to cover his tax liability.
That said, the share sells that generated the $36 million or so referred to here didn't relate to taxes. Those sells were in addition to the shares withheld for tax purposes.
This is, btw, typical of how Mr. Cook handles RSUs that vest over multi-year periods.
Comments
As for where the $35.8 million figure comes from: Mr. Cook didn't sell 990k shares, he sold 334k shares. The other approximately 656k shares were withheld by Apple to satisfy tax withholding requirements. Those approximately 656k shares represent about 52% of the shares, 1,260k, that vested for Mr. Cook on Wednesday. Of the remaining approximately 604k, he sold 334k.
So... Mr. Cook received around $136 million in stock on Wednesday. Around $71 million worth of it was withheld for tax purposes (though he may end up effectively paying a different amount). Then on Thursday and Friday around $36 million worth was sold (at a slight loss relative to the stock's valuation for tax purposes).
heres 2015:
http://www.statista.com/statistics/263264/top-companies-in-the-world-by-market-value/
With options, you have to buy them when they mature. No one really ever has the cash on hand to pay for them so you typically sell a portion to buy all the remainder. You also sell enough to cover the tax that will be levied.
Going into Politics is Stupid, just like giving away all of his money.
That's the headline that would be nice to see.
It is more than pre-planned. RSU are sold on the vesting date to pay the tax liability on the total value of the vest RCU amount. Simple example, if you have a 100 RSU vest today and they are worth $1000 at today's market price and your tax bracket is 20% you own the government $200 today and they must be paid on the day the shares vest whether you sell the entire 100 share or want to hand on to them. So Apple will automatically sell 20 share or $200 to pay the tax man. In Cook's case we do not know if the $38M is the tax bill or total vested amount including the tax bill. Considering Cook is in the 39% tax bracket (these are not consider capital gains and taxes at the lower %, they are consider income) I suspect this is just the tax bill being paid.
Since most people on here never owned RCU they would number understand this.
At Apple he can do what he thinks is right and win. In politics he can do what he thinks is right and lose. There may be a lot of people who try to persuade him to go into politics but I suspect he'd need a lot of persuading. I think he wouldn't do it if it's not something he needs to do.
The $36 million or so was the value of the 334,000 shares that Mr. Cook sold, not taking into account the more than 600,000 that were withheld for tax purposes.
Yeah, Apple typically withholds a portion of the shares for tax purposes when they vest. In Mr. Cook's case that portion has typically been a little more than 50%, he has California taxes in addition to federal taxes. In some cases the SEC filings for him have indicated that he made additional cash payments for estimated taxes because the amount of stock required to be withheld might not be enough to cover his tax liability.
That said, the share sells that generated the $36 million or so referred to here didn't relate to taxes. Those sells were in addition to the shares withheld for tax purposes.
This is, btw, typical of how Mr. Cook handles RSUs that vest over multi-year periods.