Apple CEO Tim Cook declines RSU dividends worth over $75M
It was learned through Apple's 8-K filing with the SEC on Thursday that CEO Tim Cook specifically declined to be included in a dividend award program being offered to those employees who hold restricted stock units (RSUs).
In the filing, it was reported that Apple's board of directors had decided to give RSU holders the same $2.65 per share quarterly dividends offered to public shareholders, but Cook requested not to take the award that would be worth more than $75 million.
From the 8-K filing:
After being named CEO in 2011, Cook received a one million RSU bonus which at the time was worth an estimated $383 million. The chief executive's RSUs are on a five and ten year vesting schedule, meaning that half of his restricted units vest in five years with the remainder to be converted after ten years.
Earlier this month, Cook sold 37,500 RSUs that were awarded to him during his tenure as interim CEO two years ago, netting about $11.1 million in the process.
In the filing, it was reported that Apple's board of directors had decided to give RSU holders the same $2.65 per share quarterly dividends offered to public shareholders, but Cook requested not to take the award that would be worth more than $75 million.
From the 8-K filing:
Because restricted stocks vest in intervals, an executive or employee is more apt to stay with a company and perform well to ensure the highest payout when the units convert to shares.On May 24, 2012, the Compensation Committee (the "Committee") of the Board of Directors of Apple Inc. (the "Company") approved amendments to each outstanding and unvested restricted stock unit award granted by the Company to its employees (other than Timothy D. Cook, the Company's Chief Executive Officer). The amendments provide that if the Company pays an ordinary cash dividend on its common stock, each award will be credited with an amount equal to the per-share cash dividend paid by the Company, multiplied by the total number of restricted stock units subject to the award that are outstanding immediately prior to the record date for such dividend. The amounts that are credited to each award are referred to as "dividend equivalents." Any dividend equivalents credited to an award will be subject to the same vesting, payment and other terms and conditions as the unvested restricted stock units to which the dividend equivalents relate. Depending on the domicile of the employee, accumulated dividend equivalents will either be paid in cash or used to offset employee taxes due upon vesting of the restricted stock units.
The Committee determined these amendments were appropriate in light of the Company's announcement on March 19, 2012 that it intends to commence paying ordinary cash dividends of $2.65 per share to its shareholders on a quarterly basis sometime during the fourth quarter of its 2012 fiscal year. As restricted stock units are not outstanding shares of common stock and thus would not otherwise be entitled to participate in such dividends, the crediting of dividend equivalents is intended to preserve the equity-based incentives intended by the Company when the awards were granted and to treat the award holders consistently with shareholders.
At Mr. Cook's request, none of his restricted stock units will participate in dividend equivalents. Assuming a quarterly dividend of $2.65 per share over the vesting periods of his 1.125 million outstanding restricted stock units, Mr. Cook will forego approximately $75 million in dividend equivalent value.
After being named CEO in 2011, Cook received a one million RSU bonus which at the time was worth an estimated $383 million. The chief executive's RSUs are on a five and ten year vesting schedule, meaning that half of his restricted units vest in five years with the remainder to be converted after ten years.
Earlier this month, Cook sold 37,500 RSUs that were awarded to him during his tenure as interim CEO two years ago, netting about $11.1 million in the process.
Comments
Oh, I don't know... this is all "inside baseball" that will only provoke the iHaters and anarcho-socialists who troll here regularly. It really makes no difference to customers in the slightest.
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Originally Posted by SpamSandwich
Oh, I don't know... this is all "inside baseball" that will only provoke the iHaters and anarcho-socialists who troll here regularly. It really makes no difference to customers in the slightest.
These are educated professionals, that expect the American dollar to tank any month or year now. Better to liquidate and invest elsewhere. Tim Cook is going to take good care of Apple, long after it is no longer the same company it is today, and regardless of whatever currency its stock is based in.
Just my cynical take on things.
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Originally Posted by asterizk
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This. yeah, I laughed too.
This may have a lot to do with being able to remain into a lower capital gains tax bracket. Ask Mittens Romney, he's an expert in scamming the IRS and the American people.
Maybe that's why he dines with random groups in the staff cafeteria, "hey buddy can you buy me a coffee, I'm a little short this week, I'll pay you back when I get my 90c salary."
...or maybe not.
More lily something to do with income tax.
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Originally Posted by LordJohnWhorfin
This may have a lot to do with being able to remain into a lower capital gains tax bracket. Ask Mittens Romney, he's an expert in scamming the IRS and the American people.
This coming from a IRS scammer? Do you report all your sales tax that online companies didn't collect from you? Since you decided to make the thread political, I'd rather have the choice between a person who knows business, and is smart enough to protect his own money, than a person who has never run a business for profit, constantly lies to you, and spends everyone's money like it was his own.
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Originally Posted by ljocampo
This coming from a IRS scammer? Do you report all your sales tax that online companies didn't collect from you? Since you decided to make the thread political, I'd rather have the choice between a person who knows business, and is smart enough to protect his own money, than a person who has never run a business for profit, constantly lies to you, and spends everyone's money like it was his own.
Romney knows business and is smart enough to protect his own money, but suggesting he doesn't constantly lie or won't spend the American people's money just like Barack Obama needs a serious reality check.
Romney has lied repeatedly... repeatedly... repeatedly...
Quote:
Originally Posted by SpamSandwich
Romney knows business and is smart enough to protect his own money, but suggesting he doesn't constantly lie or won't spend the American people's money just like Barack Obama needs a serious reality check.
Romney has lied repeatedly.
Reality check.
ALL politicians lie.
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Originally Posted by hill60
Reality check.
ALL politicians lie.
Another reality check. All people lie.
When did this become political? Why did this become political?
I doubt this has anything to do with fears of an insolvent dollar.
I doubt this has anything to do with the financial management or mismanagement of our incumbent president or his opponent, though I'm certain both are guilty of both.
And since no one has posed the 'all things in moderation' option, I'll do so now:
Maybe Tim Cook just doesn't want the money because, by no stretch of the imagination, does he need it. Not everyone on the planet is a money-grubber. Not everyone takes absolutely everything they can get when they can get it.
Possibly. Personally I think the devaluation of US currency is worth considering. Political leanings notwithstanding.
I like how everyone is rushing to the most cynical possible reasons for this. Everything I've heard, read, and seen from Tim Cook has given me the impression he's extremely humble, grounded, hard-working, sincere, focused, and passionate individual who is laser focused on Apple and not on himself. I can see him refusing this simply because he does not need it, is not ultra-greedy, and has enough perspective to realize he has more money than he knows what to do with and does not need a further dividend, or financial motivation to stay with Apple. This answer is more plausible than all the other ones being thrown out there. Yes, one can be rich, powerful, and have all these qualities- I know this because I personally know people like this, who make me hope that if I was so financially blessed I could remain as grounded and generous as them. Cook got to where he was by pure skill, hard-work, and intelligence- not by gaming the system, pulling strings, or inheriting wealth.
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Originally Posted by Slang4Art
Possibly. Personally I think the devaluation of US currency is worth considering. Political leanings notwithstanding.
This is preposterously wrong. He's literally giving up 75 million dollars (before taxes). If the currency is of concern he could use the 75m to buy foreign currency or assets.
As for the cap gains issue, unless the tax rate on the 75m would be 100% or more (which it would definitely not), he'd still come out economically ahead if he took the money. He's literally giving up a significant amount of money, no matter what the tax/currency issues.
This must mean that the new iPhone will have a 5-inch screen.
+++++ QFT
One of the best posts I've read in a long while...
Tim Cook is making a statement -- there are things more important than money... It's called leadership, setting an example, dedicating yourself...
It is like Mike Markkula coming out of retirement to give birth to Apple...
Or Steve taking a salary of $0.99 per year after his return to Apple as CEO.
And like Mike and Steve, in the end, Tim, and Apple, will reap the benefits many times over by the example he sets.
On the day the Apple's dividend/buyback policy was announced a couple of months ago, it was expressly made clear that Tim Cook specifically chose to exempt his personal shareholdings and share awards from any dividends whatsoever.
Someof us even commented on the fact that it was an incredibly classy thing to do.
yeah obummmer has done a fantastic job as a community organizer........oh wait.................never mind
OMG… Birther Alert !
>: )
Yep, this is old news. Nothing to see here. Move along.