8 ms·
Apple Awards Tim Cook 1,000,000 Shares of Stock as CEO Bonus to Stay Until 2021
- jbrennan 15y agoI wonder if he too will adopt the $1/year salary Jobs was known for?
- Bud 15y agoAdd this amount ($380 million or so at current Apple stock price) to the extrapolated salary for Cook over the next decade, and he will earn right around an even billion dollars in the next 10 years. Nice work, if you can get it!
- Game_Ender 15y agoNot sure he will be getting this every year. The first 50% vests in 5 years and the next 50% vests 5 years after. This seems like a large deferred bonus to encourage Cook to maintain or increase the stock price for the long term.
- mikehotel 15y agoI read that as the 380 million in 10 years deferred CEO bonus, in addition to his current 60 million/year total compensation, would total to around 1 billion at the end of 10 years. I'm going to go out on a limb and guess it will be well north of 1 billion, once stock price appreciation is accounted for. Hope he considers taking the http://givingpledge.org/ http://givingpledge.org/ :)
- jmreid 15y agoRSUs are fairly standard as a bonus inside Apple (not this many though!). Typically, they vest over four years, twice a year as long as you stay an Apple employee.
- dstein 15y agoI'd like to apply for this position. Are they still accepting resumes or is it too late?
- jrockway 15y agoWow, 58 million dollars a year. What's the incentive to work for more than one year? 58 million dollars is more than I'll ever make in my entire life.
- mrpollo 15y ago$58 p/y Assuming the stock prices will remain the same, http://www.google.com/finance?client=ob&q=NASDAQ:AAPL http://www.google.com/finance?client=ob&q=NASDAQ:AAPL
- darksaga 15y agoIt was Inevitable the stock would dip a little when Jobs announced he was stepping down. Considering he's still going to be the driving the force of the company as chairman of the board pretty much tells you all you need to know. Secondly, he wouldn't hand pick someone who didn't share his vision. Cook is smart, he's not going to drastically change the course of the company like some other cough HP cough companies have done. Considering these two things, I'd say the stock prices will stay the same if not continue to increase in value.
- aneth 15y agoAnyone worth $58M is doing it for more than the money. Jobs most certainly wouldn't have hand picked a successor who would choose retirement over running Apple.
- ugh 15y agoLeading one of the most exciting tech companies on the planet is the incentive. But I really do wonder how much additional incentive all that money can offer. At a certain point it gets impossible to spend any of the additional money.
- blantonl 15y agoDon't discount philanthropy and how that factors in to someone's sense of gratification. Take Bill Gates for example. He has accumulated far more money then he could ever spend on himself, so he went a different route and pledged to give much of his fortune away to causes he feels are worthy to give to. Remember, the process of Bill Gates giving away his money has spawned an entire business around that process: http://www.gatesfoundation.org/Pages/home.aspx http://www.gatesfoundation.org/Pages/home.aspx
- djcapelis 15y agoThe more important the person, the bigger the golden handcuffs need to be.
- ck2 15y agoHe can live off the dividends after that and only pay 15% taxes too.
- gnok 15y agoSort of hard to do, if your stock doesn't actually pay any dividend.
- blantonl 15y agomany Apple shareholders would agree wholeheartedly with this statement. With that said, all that cash they are sitting on is really interesting, considering they've been hoarding it for a while. Jobs was criticized for this in the financial arena, but his position always referred back to the days when Apple almost went down the drain. That has made them ultra-conservative from a financial perspective.
- phillco 15y agoYes, but now he has an incentive to fix that problem :)
- chollida1 15y agoWhat dividends? Apple doesn't yet pay out one, though it's possible that'd eh Luke sometime in the future.
- daimyoyo 15y agoI'm not sure it bodes well for Apple that the board feels like it has to incentivize Tim Cook with golden handcuffs. They gave Steve a lot in terms of stocks and gifts(like the free plane for example) but I can't ever rememberer him getting restricted stock to remain with Apple(except perhaps when he first came back and the company was on the verge of insolvency). Just having the ability to lead Apple always seemed like incentive enough for him.
- mynegation 15y agoI somewhere read that Tim Cook's salary was 800K and though - wow that's really not that much for a COO (and CEO-to-be) of the biggest corporation (by market cap) in the world. But then I found that total comp is more like 60M (http://people.forbes.com/profile/timothy-d-cook/6607 http://people.forbes.com/profile/timothy-d-cook/6607) which looks more like I though it should be. My point being, in 2010 Tim Cook already got 52M of restricted stock awards, so this number spread out through the years is nothing out of ordinary for him.
- kingkawn 15y ago"which looks more like I though it should be." Did you mean should? Or would?
- benatkin 15y agoWhy shouldn't it be should? He's done an amazing job and deserves to be compensated fairly. At the scale Apple's at, the number will be huge to most.
- sparky 15y agoThat's the parent's point. "More than I thought it would be" connotes that he was surprised. "More than I thought it should be" connotes that he thinks it's too much.
- alextgordon 15y ago"More like I thought it should be" Not "more than".
- sparky 15y agoYou're right, my mistake. Rest assured that the irony here does not escape me :)
- MaxGabriel 15y ago
- veyron 15y agoIf Tim Cook and Apple without Steve Jobs can continue innovating at the same pace, shareholders will see it as a small investment in Apple's future. And it seems like this was geared to appease the markets.
- jellicle 15y agoIs Tim Cook really worth as much as 580 regular Apple employees? Really? Tim Cook alone is taking home 5% of all the money Apple spends on employee compensation worldwide. If you cut down Cook's compensation a little bit, everyone else at Apple could get a couple percent raise. Which one would REALLY be better for the company: paying every single Apple employee a couple percent more enabling Apple to hire better people across the board, or paying it all to the CEO? People need to recognize how grotesque it is that you have a CEO making $160,000 per day, every day.
- bobthebee 15y agoAsk the shareholders. And since I am one I'll answer. I don't have a problem with this at all. $300M is about 1/1000 of the current market cap. The rewards are spread over 10 years. So 1/10000 per year to have a world class CEO running the company. Would I pay that? Gladly.
- jbooth 15y agoGive me a break, you don't think you could've gotten him cheaper? What's the difference between 580 million and, say, 200 million? It's funny money either way, and the person's quality of work is going to depend on other motivations.
- jbooth 15y agoWow, people are apparently seriously offended by this. Y'all really don't think they could've gotten him for cheaper?
- sunchild 15y agoIf you think Apple is about getting things for cheaper, then you don't understand Apple AT ALL.
- alexqgb 15y agoAgain, what makes you think 'cheap' is how Apple wants to be perceived? Pay more, demand more, get more. Only idiots (or the truly broke) focus on cheap when they're standing in the spotlight. What you really want is value. And given that their stock didn't crater in what is, again, the most sensitive transition imaginable, their non-asshole savvy already paid for itself several times over in the last 48 hours alone. If you're going to cut corners, play lowball, or just or drive a hard bargain, fine. But be sure you're doing it in places where you can afford to lose he deal.
- RockyMcNuts 15y agoIt's the principal-agent problem - http://en.wikipedia.org/wiki/Principal-agent_problem http://en.wikipedia.org/wiki/Principal-agent_problem You could find a lot of capable people willing to do the job for a lot less. But if you pay them a fixed salary, even $1m, that isn't directly linked to the performance you're looking for, then the game is to avoid anything too risky, even if the expected value is very high, if it might endanger the CEO's job. The game would be to take the minimum risk and do well enough to not get fired, and that's it. If Tim Cook manages to double the stock price, he'll have $700m. If it drops to $100, he'll have $100m. It's a big difference, and his interests and risks are aligned with the shareholders. Anyway, that's the theory. Give too much stock, and you're impoverishing the shareholders for little benefit. Don't give enough, and a superstar might decide he'd rather do a startup or an incubator LOL, or he may not want to pursue the same kind of risk-reward as the people who hire him. $100m is still a great deal of money. I guess going to $700m, it's the difference between superrich for life, and a legacy of being a great leader and dynastic wealth LOL. Nice work if you can get it.
- cabalamat 15y ago> If Tim Cook manages to double the stock price, he'll have $700m. If it drops to $100, he'll have $100m. It's a big difference Is it? I would imagine the lifestyle one could afford with $100M is identical to that with $700M.
- spitfire 15y agoYou can't afford a decent jet, a yacht and houses on $100M. On $700M you can. small jets start in the single digit millions. Decent jets (10+ people) are $50M easily, costing $1M+ a year. yachts can get extreme. Add in a few homes throughout the world and you've burnt through that $100M easily. Think of it as comparing a toyota to a bentley.
- ugh 15y agoYou can buy better toys but I very much doubt that the quality of life improves much. The difference between $100m and $700m is at any rate much, much smaller than the difference between $15m and $100m. Maybe that’s why so much has to be payed. A million or so more doesn’t cut it.
- jmspring 15y agoI'm sorry, but the comments on here stating "$58m is more than enough to retire upon" are naive when talking about the CEO of one of the largest (market cap) corporations in the world. Is it a lot overall? Yes. Is it comparable to the same position in similar companies? Probably, I haven't done the comparison. I know a lot of banking CEOs have been making much more for nearly wrecking the economy. I generally think the C-class officers to average employee salary is way out of whack. But, I think, given the job Tim Cook has been doing and the contribution to the valley and economy that has resulted due to Apple's success, I feel is is more than merited this generous plan. If Apple were bleeding or just average? That would be one thing, they have been running on all cylinders and Tim Cook has been instrumental in that.
- Jayasimhan 15y ago"In contrast, Steve Jobs earned a $1 annual salary every year since he rejoined Apple in 1997. While many $1-a-year CEOs reap big back-end stock and options packages, Jobs was almost a financial ascetic: He collected no stock awards most years, no cash bonuses and no perks, even turning down a 401(k) match from Apple." From http://money.cnn.com/2011/08/26/technology/tim_cook_stock_bonus/index.htm?source=cnn_bin&hpt=hp_bn3 http://money.cnn.com/2011/08/26/technology/tim_cook_stock_bo...
- justincormack 15y agoApart from the 10 million share options he got that the article mentions...
- URSpider94 15y agoFolks seem to be mentally linking this news to Warren Buffett's comments about income tax disparity. Keep in mind that RSU's are taxed as earned income, valued on the day that they vest. Any appreciation above and beyond that would indeed be taxed at capital gains rates (15% if held longer than a year after vesting), but the core value will be taxed at his marginal rate of 35%. Buffett's tax rate hovers around 15%, because the lion's share of his income comes from cap gains and qualified dividends. Cook will be paying more than double that on his income from this deal.
- jonknee 15y agoIf the shares don't change in value, that will be an approximately $67M tax bill (vs $28M if it were taxed at 15%). A good problem to have I suppose.