Apple's Cook collects nearly $90M in vested RSUs on strong stock performance

Posted:
in AAPL Investors edited August 2017
Following a surge in Apple stock performance, Apple CEO Tim Cook last week collected the maximum number of restricted stock units -- totaling 560,000 shares -- afforded by his incentive plan, raking in $89.2 million for the effort.




Cook's award of 560,000 vested RSUs, and the subsequent sale of $43.2 million common shares, was disclosed in a Securities and Exchange Commission filing on Monday.

The chief executive on Aug. 24 saw 280,000 units of time-based RSUs and another 280,000 units of performance-based RSUs vest in accordance with an incentive plan adopted by Apple's board. In order for Cook to collect the bonus in full, Apple's shareholder return for the past three years had to beat two-thirds of the companies in the S&P 500.

Adjusted for dividends, Apple's average starting value was calculated at $97.74 on Aug. 25, 2014, while the average ending value was calculated at $166.72 on Aug. 27, 2017. Apple's total shareholder return for the three-year period was 70.57 percent, good enough to rank in 80th place of the 420 companies included in the comparison.

If Apple's performance fell in the middle third of the S&P 500, Cook's RSU award would have been reduced by half. Cook would have collected nothing if Apple stock finished in the bottom-third.

Last Thursday, Apple disposed of 291,377 shares to satisfy the minimum statutory tax withholding requirements on vesting of RSUs. Cook on Friday and today sold the remaining vested RSUs in a series of transactions ranging from $159.96 to $161.43 pursuant to his trading plan. The executive netted some $43.2 million as a result of the selloff.

Cook retains 901,474 shares of common stock in his trust worth $145.6 million at the end of trading today. Another 2,940,000 RSUs are pending, including a batch of 700,000 RSUs scheduled to vest on Aug. 24, 2021. The most recent 280,000-unit award was the second of six performance-based RSU packages set to vest in annual installments through 2021.
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Comments

  • Reply 1 of 23
    I think he earned it as much as any CEO who makes about 10,000 times (I'm just guessing at that figure) more than a regular employee. Apple appears to be doing quite well despite all the people who despise Tim Cook. I wish there was more he could do to bring Apple on par with other tech companies in terms of P/E but I'm sure it's not that easy to do. I would like him to convince Wall Street that Apple isn't doomed so potential investors would have more confidence in the company.
    mark fearingnetroxanantksundaram
  • Reply 2 of 23
    I think he earned it as much as any CEO who makes about 10,000 times (I'm just guessing at that figure) more than a regular employee. Apple appears to be doing quite well despite all the people who despise Tim Cook. I wish there was more he could do to bring Apple on par with other tech companies in terms of P/E but I'm sure it's not that easy to do. I would like him to convince Wall Street that Apple isn't doomed so potential investors would have more confidence in the company.
    I won't stay he doesn't deserve it, I like him and think he was the right person to take over after Steve. The worst thing that could of happened would have been a Steve Jobs wanna-be. He is sure enough of himself to be himself. But the amountsof money does seem ridiculous when you look at the economy as a whole. It is so out of whack with so many people's income - I don't know. I imagine at some point this kind of payout will be seen a something less than positive. But,sort of like professional sports, I guess if someones gotta get it, better it's him. I feel the same about 'star' athletes. The money is on the table, it's being generated, and at least the guys putting themselves at risk are being rewarded and not just owners and 'financiers'.
    vlscout
  • Reply 3 of 23
    tshapitshapi Posts: 298member
    Does anyone else agree that this picture makes tim look like he's laughing all the way to the bank lol
  • Reply 4 of 23
    tshapi said:
    Does anyone else agree that this picture makes tim look like he's laughing all the way to the bank lol
    Nah... they were having a good laugh over the latest Samesung phone!
    watto_cobra
  • Reply 5 of 23
    Rayz2016Rayz2016 Posts: 4,768member
    tshapi said:
    Does anyone else agree that this picture makes tim look like he's laughing all the way to the bank lol
    Did … did you just lol yourself?
    macxpresswatto_cobra
  • Reply 6 of 23
    avon b7avon b7 Posts: 4,219member
    Sorry, but I find this kind of incentives obscene. No one person in any public company should be receiving anything like those figures. That's my opinion.
    edited August 2017 [Deleted User]zoetmb
  • Reply 7 of 23
    I wonder if all other Apple employees receive bonuses or do they just get their standard pay?
  • Reply 8 of 23
    Cue the class warriors...
  • Reply 9 of 23
    simply258 said:
    I wonder if all other Apple employees receive bonuses or do they just get their standard pay?
    Meaningfully all Apple employees are eligible for RSU awards now. I'm sure the size of the awards varies greatly and, of course, an employee would have to stay with the company for a certain period of time to receive the shares.

    Apple also has an employee stock purchase program which allows employees to purchase Apple shares at a discount to their trading price.
    edited August 2017
  • Reply 10 of 23
    linkmanlinkman Posts: 929member
    sog35 said:
    Well deserved Tim.

    My investment account thanks you.

    For some background;  Originally these stock options were guaranteed to Cook.  But Cook decided to change the agreement to only allow the stocks to vest if he beats industry averages.
    How the times have changed:

    https://forums.appleinsider.com/discussion/192955/citing-concerns-in-china-activist-investor-carl-icahn-no-longer-owns-shares-of-apple/p1 post # 13
    "But still Tim Cook got totally played by Ichan. He convinced Apple to do the buyback. Apple bought back $115 billion in shares and it did NOTHING to help its valuation. Ichan sells his shares for hundreds of millions in profits. Apple is stuck with $115 billion less in cash and $60 billion in debt.

    Personally I'm sick of this mismanagement in capital by Tim Cook.

    For wasting $115 billion alone he needs to be fired."

    https://forums.appleinsider.com/discussion/196471/microsoft-debuts-surface-studio-all-in-one-pc-refreshes-high-end-surface-book/p7 post # 140
    "Yup. Panos is young. He has something to prove. He has a legacy to build. He's excited and has passion.

    On the other hand Cook is fat and satisfied. No passion. No fire. No excitement.

    Apple really needs to inject some new blood. Cook/Ive/ect are old and lazy and not willing to take risks. They already have it made, all worth over $100 million each.

    I want a young CEO who is hungry. "

    https://forums.appleinsider.com/discussion/191130/apple-to-pay-italy-348m-sign-accord-to-circumvent-allegations-of-unpaid-taxes post # 23
    "
    Well then Cook should hire someone who knows how to articulate with Wall Street an investors the vision of Apple.

    He has NOT hired anyone and instead has tried to articulate the vision himself.  He has FAILED.  Wall Street and investors still view Apple as simply a hardware company.  Apple is a lifestyle and ecosystem company. Yet Wall Street does not think so.  That's Tim Cooks fault.

    Either Cook needs to hire someone who can articulate this vision or he must step down."
    Rayz2016
  • Reply 11 of 23
    carnegiecarnegie Posts: 734member
    sog35 said:
    Well deserved Tim.

    My investment account thanks you.

    For some background;  Originally these stock options were guaranteed to Cook.  But Cook decided to change the agreement to only allow the stocks to vest if he beats industry averages.
    That's true, the agreement was changed such that 40% of the existing RSUs became performance based. The other 60% remained time based. A minor correction though: Even for the performance-based RSUs, Apple doesn't have to beat industry averages in order for some of Mr. Cook's RSUs to vest. Apple can be in the middle third (of continuous S&P 500 companies) in total stock return over the relevant period and he still gets 50% of those performance-based RSUs, along with all of the time-based RSUs. That means Apple could be in the 34th percentile in TSR.

    We might also note that, when Mr. Cook agreed to make some of his RSUs performance based, he also got a change that was to his benefit. The new agreement moved up the vesting of most of the shares. Under the original terms, the RSU award meant that he'd get half of the shares (3.5 million, split adjusted) five years after he became CEO and the other half 10 years after he became CEO. That award was entirely time dependent. Under the new terms, Mr. Cook would get 8% of the shares (560,000, split adjusted) each year. Half of those shares would be time based, the other half would be performance based. Mr. Cook would also get 10% of the shares (700,000, split adjusted) five years after he became CEO and another 10% ten years after he became CEO. Those shares remained time based.

    I'll also throw this in, since it relates to the theme of Mr. Cook agreeing to condition (or give up) part of the compensation he's entitled to. He has already voluntarily given up nearly $60 million worth of dividend equivalents (on unvested RSUs) which he is entitled to. He's on course to give up a total of around $80 million worth over his first 10 years as CEO.


    jony0
  • Reply 12 of 23
    Rayz2016Rayz2016 Posts: 4,768member
    linkman said:
    sog35 said:
    Well deserved Tim.

    My investment account thanks you.

    For some background;  Originally these stock options were guaranteed to Cook.  But Cook decided to change the agreement to only allow the stocks to vest if he beats industry averages.
    How the times have changed:

    https://forums.appleinsider.com/discussion/192955/citing-concerns-in-china-activist-investor-carl-icahn-no-longer-owns-shares-of-apple/p1 post # 13
    "But still Tim Cook got totally played by Ichan. He convinced Apple to do the buyback. Apple bought back $115 billion in shares and it did NOTHING to help its valuation. Ichan sells his shares for hundreds of millions in profits. Apple is stuck with $115 billion less in cash and $60 billion in debt.

    Personally I'm sick of this mismanagement in capital by Tim Cook.

    For wasting $115 billion alone he needs to be fired."

    https://forums.appleinsider.com/discussion/196471/microsoft-debuts-surface-studio-all-in-one-pc-refreshes-high-end-surface-book/p7 post # 140
    "Yup. Panos is young. He has something to prove. He has a legacy to build. He's excited and has passion.

    On the other hand Cook is fat and satisfied. No passion. No fire. No excitement.

    Apple really needs to inject some new blood. Cook/Ive/ect are old and lazy and not willing to take risks. They already have it made, all worth over $100 million each.

    I want a young CEO who is hungry. "

    https://forums.appleinsider.com/discussion/191130/apple-to-pay-italy-348m-sign-accord-to-circumvent-allegations-of-unpaid-taxes post # 23
    "Well then Cook should hire someone who knows how to articulate with Wall Street an investors the vision of Apple.

    He has NOT hired anyone and instead has tried to articulate the vision himself.  He has FAILED.  Wall Street and investors still view Apple as simply a hardware company.  Apple is a lifestyle and ecosystem company. Yet Wall Street does not think so.  That's Tim Cooks fault.

    Either Cook needs to hire someone who can articulate this vision or he must step down."
    Impressive, but can you find a post where he mans the f**k up and admits he was wrong?


    singularity
  • Reply 13 of 23
    Just in case anyone was wondering, it is about $15B.
  • Reply 14 of 23
    StrangeDaysStrangeDays Posts: 8,596member
    Cue the class warriors...
    When average executive pay is now 400x that of worker pay, and when it used to only be 12x in the prosperous post-war era, then yeah, maybe we need more class warriors. It does society and the economy little good to pool the wealth into the few. Rather than this being culturally accepted and celebrated, perhaps making it likewise accepted and celebrated to give this money back to the workers who do the work would be a good thing.
    avon b7singularity
  • Reply 15 of 23
    foggyhillfoggyhill Posts: 4,767member
    linkman said:
    sog35 said:
    Well deserved Tim.

    My investment account thanks you.

    For some background;  Originally these stock options were guaranteed to Cook.  But Cook decided to change the agreement to only allow the stocks to vest if he beats industry averages.
    How the times have changed:

    https://forums.appleinsider.com/discussion/192955/citing-concerns-in-china-activist-investor-carl-icahn-no-longer-owns-shares-of-apple/p1 post # 13
    "But still Tim Cook got totally played by Ichan. He convinced Apple to do the buyback. Apple bought back $115 billion in shares and it did NOTHING to help its valuation. Ichan sells his shares for hundreds of millions in profits. Apple is stuck with $115 billion less in cash and $60 billion in debt.

    Personally I'm sick of this mismanagement in capital by Tim Cook.

    For wasting $115 billion alone he needs to be fired."

    https://forums.appleinsider.com/discussion/196471/microsoft-debuts-surface-studio-all-in-one-pc-refreshes-high-end-surface-book/p7 post # 140
    "Yup. Panos is young. He has something to prove. He has a legacy to build. He's excited and has passion.

    On the other hand Cook is fat and satisfied. No passion. No fire. No excitement.

    Apple really needs to inject some new blood. Cook/Ive/ect are old and lazy and not willing to take risks. They already have it made, all worth over $100 million each.

    I want a young CEO who is hungry. "

    https://forums.appleinsider.com/discussion/191130/apple-to-pay-italy-348m-sign-accord-to-circumvent-allegations-of-unpaid-taxes post # 23
    "
    Well then Cook should hire someone who knows how to articulate with Wall Street an investors the vision of Apple.

    He has NOT hired anyone and instead has tried to articulate the vision himself.  He has FAILED.  Wall Street and investors still view Apple as simply a hardware company.  Apple is a lifestyle and ecosystem company. Yet Wall Street does not think so.  That's Tim Cooks fault.

    Either Cook needs to hire someone who can articulate this vision or he must step down."
    Cook's fracking goal is not sucking the tit of investors, but managing the company long term.

    If Apple continue producing cash like it has,. the buyback will be profitable both for investors (with much higher dividends) and Apple cause it may in fact pay less in dividend long term by doing that. Other option would be to sit on money or invest in real crap.  That Wall Street takes 10 years to realize all this is immaterial, it will eventually have an impact in actuality.
  • Reply 16 of 23
    zoetmbzoetmb Posts: 2,483member
    avon b7 said:
    Sorry, but I find this kind of incentives obscene. No one person in any public company should be receiving anything like those figures. That's my opinion.
    I agree.   And in the long run, when a large number of decision makers have huge incomes, IMO it hurts the company because it skews their perception of the world and how "normal people", the people who they're selling to,  live.   I think this is one of the reasons that Apple thinks a $1000+ iPhone and $3000-$4000 MacBook Pros are "acceptable".    I think they forget that average income in the U.S. is only around $55,000 per year.    

    A bit further down the hierarchy, large incomes for a massive number of employees don't necessarily help them all that much because it skews housing prices to the point where their large income doesn't really let them live a better lifestyle.    When a house that would have been $175,000 not all that long ago is selling for $1.75 million today, that doesn't help anyone but the person who sold the house, and it only helps them if they move to a less expensive area.  

    Back in the day, the railroad barons and other gilded age owners may have been terrible people, but they did build great public spaces, opera houses and endow museums, libraries, parks, hospitals and schools.    You don't see that today among the super-rich.    They're too concerned with losing their place on Forbes' lists of the most wealthy.
    avon b7
  • Reply 17 of 23
    It is a slap in the face to workers at Apple. Not only that, Apple is sitting in a $256 billion cash hoard and Tim Cook just nets a $90 million stock bonus and they have the nerve to put a link on their website asking regular people for donations to help in hurricane Harvey relief. Disgusting.
  • Reply 18 of 23
    Cue the class warriors...
    When average executive pay is now 400x that of worker pay, and when it used to only be 12x in the prosperous post-war era, then yeah, maybe we need more class warriors. It does society and the economy little good to pool the wealth into the few. Rather than this being culturally accepted and celebrated, perhaps making it likewise accepted and celebrated to give this money back to the workers who do the work would be a good thing.
    Where do you think all his money is going to go?
  • Reply 19 of 23

    It is a slap in the face to workers at Apple. Not only that, Apple is sitting in a $256 billion cash hoard and Tim Cook just nets a $90 million stock bonus and they have the nerve to put a link on their website asking regular people for donations to help in hurricane Harvey relief. Disgusting.
    Unbelievable. Do you have any clue whether and how much he personally gave for Harvey relief? Your blithe pre-emptive negative judgment of people is actually what is disgusting.

    Btw, to whom do you think the $256B in cash belongs?
  • Reply 20 of 23

    zoetmb said:
    avon b7 said:
    Sorry, but I find this kind of incentives obscene. No one person in any public company should be receiving anything like those figures. That's my opinion.
    Back in the day, the railroad barons and other gilded age owners may have been terrible people, but they did build great public spaces, opera houses and endow museums, libraries, parks, hospitals and schools.    You don't see that today among the super-rich.    They're too concerned with losing their place on Forbes' lists of the most wealthy.
    Um... really? Have you heard of the Gates Foundation? Do you know that Warren Buffet has pledged ALL of his Berkshire Hathaway stock -- Its value is probably upward of $75B -- to charity (actually, to the Gates Foundation)? Did you know that Zuckerberg has pledged to give away almost ALL his wealth? Have you heard of The Giving Pledge? Why don't you go over there and see how much 170 billionaires have pledged to charity, and educate yourself a bit instead of spouting ill-informed nonsense?
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