Tim Cook held all his Apple stock in 2022, as other execs sold

AppleInsider

A number of Apple executives sold more of their stocks in the company in 2022 than the year before, but Tim Cook didn't sell any.

Recently, Cook notably asked for his overall salary to effectively have a 40% cut. Now it's been revealed that he also hasn't sold stock, while Apple executives such as CFO Luca Maestri sold substantial quantities.

In one such sale, Maestri sold stock worth $16.9 million, but now according to Barrons, across the whole of 2022, he sold $44.4 million shares. Deirdre O'Brien, senior vice president for retail and people sold $35.3 million worth of shares, while general counsel Kate Adams sold $38.1 million.

All three sold more in 2022 than they had in 2021. COO Jeff Williams sold less than in 2021, at $18.8 million compared to $39.9 million.

In comparison, Cook's last sale of stock came in August 2021. At that time, as part of his original deal for taking over as CEO in 2011, he received 5,040,000 shares.

He sold all of them, earning approximately $355 million.

Barrons notes that it's not known whether Cook elected not to sell any shares. It's possible that, as with other executives such as Maestri, sales can be automatically triggered when predetermined conditions such as rising stock price levels occur.

Apple's stock has been going through a tumultuous year, but separately, the Wedbush investment firm has recommended holding on to shares in the company.

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netrox

It shows that he has a lot of faith in Apple, unlike those CEOs who dump their stocks knowing that they will lose a lot. 

anonconformist

At some point, unless you have personal plans to do something that requires a huge (a relative term) amount of cash, there’s no real pressure to cash out if you already have far more than enough to satisfy your current budget and anticipated desires.

Add the inflation into the equation and how anyone that understands how reality works could foresee major inflation with all the money printing, translating to cash before you need it just helps with paying off taxes to the IRS sooner on shares that you might have locked in a lower share price as a result, so you’ve volunteered to take both short-term and long-term losses, as inflation eats away the spending power of the cash.

Meanwhile, assuming share prices are rational, Apple has the ability to raise prices without it being an issue, in order to still keep margins and sales.

He’s presumably got more than enough in the bank (which, if things really hit the fan and there are bail-ins enacted, are gone) that if he were to be terminated tomorrow or Apple suddenly went bankrupt (both extremely improbable) he can readily financially be in luxury for the rest of his life without a meaningful effort.

So, is it a vote of confidence to not sell any shares since 2021? I see it as hedging his bets, as the worst-case scenario seems probable he’s covered by having such a mixture of cash and shares, where only dying is going to cause a problem. No signs of that being a concern, either.

carnegie

Mr. Cook did the same thing, with regard to share sales, in 2022 as he did in 2021... he sold all of his vesting shares (net of tax withholding, of course). In 2021 he had a large block vest, they were the last shares from the RSU grant he received when he became CEO. He didn't have any vest in 2022 because there was a gap between that last block vesting in 2021 and the first shares vesting from the newer RSU grants he's received.

Mr. Maestri and Ms. O'Brien, likewise, did the same thing with regard to share sales in 2022 as they did in 2021... they sold all of their vesting shares. The value of their vesting shares was greater in 2022 than in 2021, hence the different values for their share sales between those years.

Ms. Adams had been doing sales a little differently. She had been selling them in smaller blocks of a set number of shares, with total sales not necessarily corresponding to how many shares she received. With the vesting of her latest block in late 2022, she sold all of the newly vested shares.

Mr. Williams did do something different in 2022. He didn't sell his newly vesting shares in late 2022 whereas previously he had been selling them as they vested.

carnegie

netrox said:

It shows that he has a lot of faith in Apple, unlike those CEOs who dump their stocks knowing that they will lose a lot. 

More likely, Mr. Cook didn't sell any shares in 2022 because he didn't receive any newly vesting shares.

His sales have followed a predictable pattern for quite a few years now. When he receives newly vesting shares, he sells them almost immediately. Otherwise he doesn't sell any shares. Occasionally he gifts a number of shares. He has a block of shares which he built up years ago which he retains, other than the gifting I just referred to.

jdw

Selling stock when you don't have to sell, during a year when stocks are down, is not a smart move.  And yet, so many do just that.

But before we call Tim Cook "smart" for not having sold any AAPL shares in 2022, one must consider Tim's sale in August 2021 which garnered him $355 million. If he never sold a single share again, he would be doing just fine, even as someone giving his money away.  Evidence of that comes in his willingness to have his own salary cut.  

At some point, you have too much money and then seek to give it all away in the knowledge that you cannot take it with you when you die. Philanthropy sometimes does a modest good to society (albeit temporary), but it mainly is done to keep the name of that wealthy person in lights for as long as humanity remembers this era of human history.  If praise and thanks isn't what a rich person seeks, that rich person won't create foundation with their name on it.

So how does all this impact "the rest of us"?  Well, no educated person should simply stuff money in a bank and expect bank interest to outpace inflation.  Investing in mutual funds and stocks is the only intelligent move. For a very long time, investing in AAPL has been a part of one's overall investment strategy. If one ponders AAPL shareholder decisions since the stock went public, "BUY & HOLD" is clearly the best strategy of all, despite the fact that during the early years there were no dividends paid at all.

Do I take my own medicine?  Yes.  I first started acquiring AAPL in 1999, and to date, I've not sold a single share.  Even if one day you will sell, having the intestinal fortitude to NOT SELL as long as you can is praiseworthy in the extreme, and the upside is that, these days anyway, you receive dividends too.

Resist the urge to sell.  You'll thank me for it.