Retail is getting less and less important. Brick and Mortar stores? Why bother?
What has she done to justify her $100 million salary? Not much.
She messed up the Watch launch. Retail stores look basically the same. China sales has TANKED last year (her calling card was growing China like she did for Burbury) and I have not seen anything spectacular. The retail store experience buying stuff on release day still kind sucks.
Again why is she getting paid $100 million?
Ms. Ahrendts did get a rather large (what might be thought of as a) signing bonus when she agreed to come to Apple, mostly in the form of RSUs. Those RSUs were to vest over several years and most of them already have.
But beyond the package she got when she joined Apple, she makes more or less the same as the (7) other SVPs and the COO. Depending on how well Apple and AAPL do, they (with some relatively small variation between them) make in the ballpark of $25 million in total compensation per year.
It's my own personal suspicion that Ahrends was brought in as a backup to Tim Cook in case he decides to leave or if he was unable to continue to serve as CEO. Her overly generous compensation tipped me to that conclusion.
I suppose that's possible, but her compensation package wouldn't cause me to conclude that.
I think Apple, if it wanted her to come to Apple, had to give her a large initial compensation package because she would be walking away from a lot of money (in the form of unvested stock) if she left Burberry. And she was already making a lot of money as CEO of Burberry. She had not too long before been named as the highest paid CEO in the United Kingdom.
And as I indicated, after that initial package, her total compensation has been in line with the rest of Apple's SVPs.
She came in with the promise of a major retail re-imagining. I haven't seen that happen. Retail stores are fine but seem on auto-pilot, no major change.
Yup... I think you could have saved millions with a magic 8-ball at the helm and gotten the same results.
(oh and retail gurus I know well have said, yeah basically the case... in retail circles people are jealous of her because she's getting insane dollars for basically rookie work)
She came in with the promise of a major retail re-imagining. I haven't seen that happen. Retail stores are fine but seem on auto-pilot, no major change.
Yup... I think you could have saved millions with a magic 8-ball at the helm and gotten the same results.
(oh and retail gurus I know well have said, yeah basically the case... in retail circles people are jealous of her because she's getting insane dollars for basically rookie work)
As long as the stores continue to be incredibly successful, they really need not stray far from their current layout or retail philosophy, which begs the question: why was the CEO of Burberry needed to fill the spot? I'm certain she's a very capable person and has been recognized for her work at her former job, but Ron Johnson did a decent job while Steve was still around.
It sort of illustrates that Steve Jobs had the mentality and drive of a parent for his child, Apple, Inc. He was the owner and acted like it. When one is only a hire, sudden moves and wild, uninformed decision-making is enough to get one canned in short order. One does not think in holistic terms about the future of the company, what level of risk-taking is acceptable, what the company is about in a meaningful way.
She came in with the promise of a major retail re-imagining. I haven't seen that happen. Retail stores are fine but seem on auto-pilot, no major change.
Yup... I think you could have saved millions with a magic 8-ball at the helm and gotten the same results.
(oh and retail gurus I know well have said, yeah basically the case... in retail circles people are jealous of her because she's getting insane dollars for basically rookie work)
As long as the stores continue to be incredibly successful, they really need not stray far from their current layout or retail philosophy, which begs the question: why was the CEO of Burberry needed to fill the spot? I'm certain she's a very capable person and has been recognized for her work at her former job, but Ron Johnson did a decent job while Steve was still around.
It sort of illustrates that Steve Jobs had the mentality and drive of a parent for his child, Apple, Inc. He was the owner and acted like it. When one is only a hire, sudden moves and wild, uninformed decision-making is enough to get one canned in short order. One does not think in holistic terms about the future of the company, what level of risk-taking is acceptable, what the company is about in a meaningful way.
I think Apple would have loved for Mr. Johnson to stay on as SVP in charge of retail, but he wanted to try his hand as CEO of JC Penney.
Since the issue of Ms. Ahrendts compensation has been discussed in this thread, it may be worth noting that Mr. Johnson was also very well compensated when he held that position. (Obviously there's a difference between them in that Mr. Johnson filled that role from the beginning and played a significant role in building the Apple Store franchise from the ground up.)
When Mr. Johnson came to Apple in 2000 he received what would today (i.e. in split-adjusted terms) be 16.8 million AAPL options. It took a while for those options to increase in value enough to represent a fortune, but that's just what they did. Mr. Johnson eventually exercised them and sold the shares for a net of around $240 million. In his first few years at Apple he was awarded additional options which eventually netted him another $70 million. Apple then moved to awarding executives RSUs instead of stock options as part of their compensation. In 2004 Mr. Johnson was awarded 3.5 million (split-adjusted) RSUs that were collectively worth about $50 million when they vested in 2006 and 2008, and in 2006 he was awarded another 1.4 million (split-adjusted) RSUs that were worth around $46 million when they vested in 2010. He sold the latter batch (i.e. those from the 2006 grant) but as of the last Section 16 filing we have (from 2010) he still held about 1.6 million (split-adjusted) shares which represent the bulk of the after-tax shares he got from the 2004 grant. If he hasn't sold them since he left Apple, they're worth more than $200 million now.
Mr. Johnson also forfeited unvested RSUs (from grants in 2008 and 2010) which were, at the time, worth about $100 million when he left Apple in late 2011. A large block of those (1.05 million split-adjusted shares) would have vested 5 months later and, at that time, been worth about $90 million. The rest would have vested in 2010 at a value of about $70 million.
Anyway... yeah, the last SVP in charge of retail at Apple (who served in that role for a while) made out pretty well financially also.
It's little more than a fanciful thought, but had Mr. Johnson held all of the shares he was awarded through options and RSUs, he'd have about 30 million shares worth more than $4 billion today. Of course, he would have had some tax bills along the way so holding all of those shares likely would have been implausible. He'd also have paid about $70 million to acquire many of those shares on the exercise of options.
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I think Apple, if it wanted her to come to Apple, had to give her a large initial compensation package because she would be walking away from a lot of money (in the form of unvested stock) if she left Burberry. And she was already making a lot of money as CEO of Burberry. She had not too long before been named as the highest paid CEO in the United Kingdom.
And as I indicated, after that initial package, her total compensation has been in line with the rest of Apple's SVPs.
It sort of illustrates that Steve Jobs had the mentality and drive of a parent for his child, Apple, Inc. He was the owner and acted like it. When one is only a hire, sudden moves and wild, uninformed decision-making is enough to get one canned in short order. One does not think in holistic terms about the future of the company, what level of risk-taking is acceptable, what the company is about in a meaningful way.
Since the issue of Ms. Ahrendts compensation has been discussed in this thread, it may be worth noting that Mr. Johnson was also very well compensated when he held that position. (Obviously there's a difference between them in that Mr. Johnson filled that role from the beginning and played a significant role in building the Apple Store franchise from the ground up.)
When Mr. Johnson came to Apple in 2000 he received what would today (i.e. in split-adjusted terms) be 16.8 million AAPL options. It took a while for those options to increase in value enough to represent a fortune, but that's just what they did. Mr. Johnson eventually exercised them and sold the shares for a net of around $240 million. In his first few years at Apple he was awarded additional options which eventually netted him another $70 million. Apple then moved to awarding executives RSUs instead of stock options as part of their compensation. In 2004 Mr. Johnson was awarded 3.5 million (split-adjusted) RSUs that were collectively worth about $50 million when they vested in 2006 and 2008, and in 2006 he was awarded another 1.4 million (split-adjusted) RSUs that were worth around $46 million when they vested in 2010. He sold the latter batch (i.e. those from the 2006 grant) but as of the last Section 16 filing we have (from 2010) he still held about 1.6 million (split-adjusted) shares which represent the bulk of the after-tax shares he got from the 2004 grant. If he hasn't sold them since he left Apple, they're worth more than $200 million now.
Mr. Johnson also forfeited unvested RSUs (from grants in 2008 and 2010) which were, at the time, worth about $100 million when he left Apple in late 2011. A large block of those (1.05 million split-adjusted shares) would have vested 5 months later and, at that time, been worth about $90 million. The rest would have vested in 2010 at a value of about $70 million.
Anyway... yeah, the last SVP in charge of retail at Apple (who served in that role for a while) made out pretty well financially also.
It's little more than a fanciful thought, but had Mr. Johnson held all of the shares he was awarded through options and RSUs, he'd have about 30 million shares worth more than $4 billion today. Of course, he would have had some tax bills along the way so holding all of those shares likely would have been implausible. He'd also have paid about $70 million to acquire many of those shares on the exercise of options.