Apple CEO Tim Cook receives 255,000 shares of Apple stock

AppleInsiderAppleInsider
Posted:
in General Discussion edited September 2021
Apple CEO Tim Cook has received more than 255,000 shares of Apple stock as part of a new compensation package that will run through 2026.

Credit: Apple
Credit: Apple


Back in August, Cook received more than 5 million shares of Apple stock and sold them for more than $750 million. The stock transfer was the final part of a compensation package that Cook received when he became CEO of Apple in 2011.

On Sunday, Cook received 255,000 shares of Apple stock, according to a filing with the Securities and Exchange Commission posted to Apple's website on Sept. 28. By a rough estimate, the stocks are worth about $36.51 million.

In September 2020, the Apple chief executive was awarded his largest stock grant since 2011. The stock awards are meant to incentivize continued work at the company through 2025, and could see Cook receive more than 1 million shares by 2025.

The majority of Cook's compensation is in the form of restricted stock units. However, Cook still receives a salary and an annual bonus in addition to the shares.

Since Cook became Apple's chief executive in 2011, the Cupertino tech giant's share price has risen more than 1,100%.

Back in 2015, Cook revealed that he plans to donate the vast majority of his wealth to charity before he dies. The chief executive also regularly donates stocks to unnamed charities, most recently in August 2021.

Update September 29, 12:51 PM Eastern Time: A previous version of this story misreported the number of shares that Cook received. AppleInsider apologizes for the error.

Read on AppleInsider

Comments

  • Reply 1 of 19
    vesaliusvesalius Posts: 12member
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    elijahgmarklark
  • Reply 2 of 19
    carnegiecarnegie Posts: 1,078member
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    In what way are they evading CEO taxes?
    mike1applguyviclauyycfastasleep
  • Reply 3 of 19
    mike_gallowaymike_galloway Posts: 106member
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    I would all be grateful for your insight to this CEO tax subject, if you have the time to explain. I know nothing about it, thanking you in advance.
    mwhiteapplguy
  • Reply 4 of 19
    libertyandfreelibertyandfree Posts: 158member
    carnegie said:
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    In what way are they evading CEO taxes?
    There is no way Tim Cook is avoiding income taxes on his RSU’s, people make comments with no basis in fact.  If he is please let all of us know since many of us also receive RSU’s every year and I definitely pay income taxes on them. 
    JFC_PAmike1applguy
  • Reply 5 of 19
    vesaliusvesalius Posts: 12member
    Depends on his vesting schedule how long he can delay payment. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp  The option to donate as of yet untaxed shares that have increased in value on paper also offers more tax advantages than donating already taxed salary. Can structure/choose to take less actual monetary salary in the years of RSU vesting decreasing other taxable income for that year. No such luck for anyone with a w2 income. 
    edited September 2021 caladaniangatorguy
  • Reply 6 of 19
    mike_gallowaymike_galloway Posts: 106member
    vesalius said:
    Depends on his vesting schedule how long he can delay payment. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp  The option to donate as of yet untaxed shares that have increased in value on paper also offers more tax advantages than donating already taxed salary. Can structure/choose to take less actual monetary salary in the years of RSU vesting decreasing other taxable income for that year. No such luck for anyone with a w2 income. 
    Thank you for the explanation - If you are intending to give most of your wealth to charity then I you probably don't want more than is necessary to go in taxes, unless you like the way the government spends your money.
    mike1applguyviclauyyc
  • Reply 7 of 19
    jas99jas99 Posts: 150member
    Worth every penny. 
    JFC_PAmike1retrogustoviclauyyc
  • Reply 8 of 19
    StrangeDaysStrangeDays Posts: 12,881member
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    You know, not even the jocks of my high school years were as butthurt about standing up for gay, women, & minority rights as you folks are. Hate to break it to ya, but you're on the wrong side of history on this one. Accept.
    edited September 2021 mike1viclauyyc
  • Reply 9 of 19
    carnegiecarnegie Posts: 1,078member
    vesalius said:
    Depends on his vesting schedule how long he can delay payment. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp  The option to donate as of yet untaxed shares that have increased in value on paper also offers more tax advantages than donating already taxed salary. Can structure/choose to take less actual monetary salary in the years of RSU vesting decreasing other taxable income for that year. No such luck for anyone with a w2 income. 
    These shares are as of yet untaxed because Mr. Cook hasn't received them. It's comparable to having an employment contract that says, conditions being met, you'll get paid some amount of money next year. You generally wound't be taxed on that future income until you earned and received it. Something might happen and you never get that income and, generally speaking, employment income is taxed when it's made rather than when it's contracted for or offered.

    The salary Mr. Cook receives this year will be taxed as income for this year. The salary he receives next year will be taxed as income for next year. The same is true of equity compensation. He'll receive these shares in 2024, 2025, and 2026 if he's still employed by Apple and if, for some of them, certain performance targets are met. That's when he'll incur income tax liability for them - based on their value when he receives them. That doesn't representing avoiding taxes, it's how income taxes work - for most everyone, not just executives or those compensated through equity.

    As for charitable donations... yes, people can sometimes avoid taxes on money (or value) they donate. But that's true whether they're receiving compensation in the form of equity or in cash. For income tax purposes, these equity awards are treated as though the recipient was paid cash in an amount equal to the value of the shares they receive on the day they receive them.
    mike1applguyFileMakerFellerviclauyycRudeBoyRudy
  • Reply 10 of 19
    carnegiecarnegie Posts: 1,078member

    libertyandfree said:
    carnegie said:
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    In what way are they evading CEO taxes?
    There is no way Tim Cook is avoiding income taxes on his RSU’s, people make comments with no basis in fact.  If he is please let all of us know since many of us also receive RSU’s every year and I definitely pay income taxes on them. 
    Yes, he likely won't be avoiding taxation of this compensation when he actually gets it. But I've talked to a number of people who think executives are paid through these kinds of awards because there are big tax advantages (for them) for this kind of compensation as opposed to being paid cash.
  • Reply 11 of 19
    gatorguygatorguy Posts: 24,213member
    carnegie said:
    vesalius said:
    Depends on his vesting schedule how long he can delay payment. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp  The option to donate as of yet untaxed shares that have increased in value on paper also offers more tax advantages than donating already taxed salary. Can structure/choose to take less actual monetary salary in the years of RSU vesting decreasing other taxable income for that year. No such luck for anyone with a w2 income. 
    These shares are as of yet untaxed because Mr. Cook hasn't received them. It's comparable to having an employment contract that says, conditions being met, you'll get paid some amount of money next year. You generally wound't be taxed on that future income until you earned and received it. Something might happen and you never get that income and, generally speaking, employment income is taxed when it's made rather than when it's contracted for or offered.

    The salary Mr. Cook receives this year will be taxed as income for this year. The salary he receives next year will be taxed as income for next year. The same is true of equity compensation. He'll receive these shares in 2024, 2025, and 2026 if he's still employed by Apple and if, for some of them, certain performance targets are met. That's when he'll incur income tax liability for them - based on their value when he receives them. That doesn't representing avoiding taxes, it's how income taxes work - for most everyone, not just executives or those compensated through equity.

    As for charitable donations... yes, people can sometimes avoid taxes on money (or value) they donate. But that's true whether they're receiving compensation in the form of equity or in cash. For income tax purposes, these equity awards are treated as though the recipient was paid cash in an amount equal to the value of the shares they receive on the day they receive them.
    He more than likely takes advantage of a not well-known tax avoidance strategy used by the ultra-wealthy: Donor-Advised funds. That's why it has never been reported who the recipients of his charitable stock donations have been.  While it sounds as if a CEO (or equivalent) has given a charitable gift to some specific non-profit(s) to use as they see fit, no longer "theirs" to control and direct, they have not. But they do get the tax benefits immediately as though they have.

    So why not a private foundation instead? A foundation would have to use part of the fund every year to maintain its tax status. A donor-assisted fund does not. 

    Much-loved by big tech CEO's and their families or partners.  If anyone is curious what Donor-Advised funds are, how they work, and why some people might see them as a legal tax dodge for the ultra-wealthy...
    https://www.investopedia.com/articles/managing-wealth/080216/donoradvised-funds-benefits-and-drawbacks.asp
    https://www.washingtonpost.com/lifestyle/style/zombie-philanthropy-the-rich-have-stashed-billions-in-donor-advised-charities--but-its-not-reaching-those-in-need/2020/06/23/6a1b397a-af3a-11ea-856d-5054296735e5_story.html

     
    edited September 2021 ctt_zhapplguyFileMakerFeller
  • Reply 12 of 19
    JFC_PAJFC_PA Posts: 932member
    So that new house in L. A. is covered. Good to know. 
  • Reply 13 of 19
    JFC_PAJFC_PA Posts: 932member
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    Except. Of course. They’re not. So there’s that. 
  • Reply 14 of 19
    ctt_zhctt_zh Posts: 67member
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    You know, not even the jocks of my high school years were as butthurt about standing up for gay, women, & minority rights as you folks are. Hate to break it to ya, but you're on the wrong side of history on this one. Accept.
    Where did Vesalius state that he disagrees with Tim's opinions? I can only see him stating that Apple / Tim make opinions on sociopolitical topics.    
  • Reply 15 of 19
    mike1mike1 Posts: 3,286member
    carnegie said:

    libertyandfree said:
    carnegie said:
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
    In what way are they evading CEO taxes?
    There is no way Tim Cook is avoiding income taxes on his RSU’s, people make comments with no basis in fact.  If he is please let all of us know since many of us also receive RSU’s every year and I definitely pay income taxes on them. 
    Yes, he likely won't be avoiding taxation of this compensation when he actually gets it. But I've talked to a number of people who think executives are paid through these kinds of awards because there are big tax advantages (for them) for this kind of compensation as opposed to being paid cash.
    RSUs are issued to all levels of employees and are considered long-term incentives. Thought being that if the company does well over an extended period of time, you do too. The goal is to have the value of the stock appreciate. Plenty of examples of RSUs that are worth nothing because the company tanks. Also encourages employees to stick around because you lose them if you leave the company.

  • Reply 16 of 19
    waveparticlewaveparticle Posts: 1,497member
    vesalius said:
    Depends on his vesting schedule how long he can delay payment. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp  The option to donate as of yet untaxed shares that have increased in value on paper also offers more tax advantages than donating already taxed salary. Can structure/choose to take less actual monetary salary in the years of RSU vesting decreasing other taxable income for that year. No such luck for anyone with a w2 income. 
    What is the ethical point of view that proves this is evading taxes?
  • Reply 17 of 19
    ivanhivanh Posts: 597member
    CEOs should receive only preferential shares without voting rights.
  • Reply 18 of 19
    FileMakerFellerFileMakerFeller Posts: 1,546member
    gatorguy said:
    carnegie said:
    vesalius said:
    Depends on his vesting schedule how long he can delay payment. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp  The option to donate as of yet untaxed shares that have increased in value on paper also offers more tax advantages than donating already taxed salary. Can structure/choose to take less actual monetary salary in the years of RSU vesting decreasing other taxable income for that year. No such luck for anyone with a w2 income. 
    These shares are as of yet untaxed because Mr. Cook hasn't received them. It's comparable to having an employment contract that says, conditions being met, you'll get paid some amount of money next year. You generally wound't be taxed on that future income until you earned and received it. Something might happen and you never get that income and, generally speaking, employment income is taxed when it's made rather than when it's contracted for or offered.

    The salary Mr. Cook receives this year will be taxed as income for this year. The salary he receives next year will be taxed as income for next year. The same is true of equity compensation. He'll receive these shares in 2024, 2025, and 2026 if he's still employed by Apple and if, for some of them, certain performance targets are met. That's when he'll incur income tax liability for them - based on their value when he receives them. That doesn't representing avoiding taxes, it's how income taxes work - for most everyone, not just executives or those compensated through equity.

    As for charitable donations... yes, people can sometimes avoid taxes on money (or value) they donate. But that's true whether they're receiving compensation in the form of equity or in cash. For income tax purposes, these equity awards are treated as though the recipient was paid cash in an amount equal to the value of the shares they receive on the day they receive them.
    He more than likely takes advantage of a not well-known tax avoidance strategy used by the ultra-wealthy: Donor-Advised funds. That's why it has never been reported who the recipients of his charitable stock donations have been.  While it sounds as if a CEO (or equivalent) has given a charitable gift to some specific non-profit(s) to use as they see fit, no longer "theirs" to control and direct, they have not. But they do get the tax benefits immediately as though they have.

    So why not a private foundation instead? A foundation would have to use part of the fund every year to maintain its tax status. A donor-assisted fund does not. 

    Much-loved by big tech CEO's and their families or partners.  If anyone is curious what Donor-Advised funds are, how they work, and why some people might see them as a legal tax dodge for the ultra-wealthy...
    https://www.investopedia.com/articles/managing-wealth/080216/donoradvised-funds-benefits-and-drawbacks.asp
    https://www.washingtonpost.com/lifestyle/style/zombie-philanthropy-the-rich-have-stashed-billions-in-donor-advised-charities--but-its-not-reaching-those-in-need/2020/06/23/6a1b397a-af3a-11ea-856d-5054296735e5_story.html

     
    Rich people playing the game by the rules set by other rich people? Say it ain't so! :wink: 
  • Reply 19 of 19
    davidwdavidw Posts: 2,053member
    vesalius said:
    Some one needs to lecture Apple/Cook and the bad politics of evading ceo taxes. Apple and Tim offer opinions on a multitude of nonfinancial sociopolitical topics why not this one? 
           vesalius said: 

     Depends on his vesting schedule how long he can delay payment. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp  The option to donate as of yet untaxed shares that have increased in value on paper also offers more tax advantages than donating already taxed salary. Can structure/choose to take less actual monetary salary in the years of RSU vesting decreasing other taxable income for that year. No such luck for anyone with a w2 income. 



    Just exactly where did you get the idea that Cook is "donating" some of his RSU, before they are vested? The article mentioned that Cook donated a significant amount of the RSU that was vested and he received earlier this year. No where did the article mention or even implied that he has donated any of the 255K RSU he just received. or even able to donate RSU before they are vested. To the IRS, those 255K shares are worthless, until vested. Which is why no taxes are due, until they are vested. 

    Or are you also going to claim that Cook is evading taxes on his newly award 255K RSU because he doesn't have to pay taxes on it, at the time they were awarded to him?  If so, then you need to do some research on RSU and why the "R" stands for "restricted". 

    I think you are confusing this with being awarded so many shares of a company stock at a certain share price, but the person can not sell those shares until after a certain period of time. In these cases, the person has to pay the taxes on the value of those shares when it was awarded, as ordinary income. And then, any increase of value of those shares as capital gains (either long term or short term depending on the length of time after being awarded and selling.)  Any loss of value would result in a refund on the taxes that were already paid for those shares. These type of stocks or option awards are being done away with, as they can be a headache, accounting and tax wise, not only for the company but also the person receiving the award. 
    edited September 2021
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