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Totally agree. I'm guessing that those options are spread over the 10 years, so we're talking roughly $37m a year if the stock remains at the same price. It's j
by egiva 15y ago
Totally agree. I'm guessing that those options are spread over the 10 years, so we're talking roughly $37m a year if the stock remains at the same price. It's just paper money until those options become liquid, and he's working at a big discount when compared to Jobs' 5.5+ million shares from 1997 until today (14 years).
So yeah, taking into consideration that Apple is suddenly working with a CEO that arguably requires less compensation than Jobs, my issue isn't with the amount, but rather how he's taxed and more broadly, the large divide between the top income tax bracket (35%+) and capital gains (15%) which is really terrible, considering that it consitutes an enormous tax loophole for people who earn their income via investments, rather than a traditional wage.
- MaysonL 15y agoThey're not options, they're stock grants, which vest at 5 and 10 years.
- egiva 15y agoGood point, but the issue still stands - it's less stock per year than Jobs' compensation, not taking into account any other standard compensation that Cook will receive. My understanding of a grant is that the stock can be vested or restricted, although I assume that after a 5-year wait it will be vested when Cook receives it, so he'll owe taxes on it. That's probably why a 5-year period also favors Cook because Apple will be required to withhold tax on the market value of the stock, and it's tricky how that withholding is paid - for cash grants they withhold a percentage of that sum to satisfy the estimated tax, but unfortunately for stock grants, sometimes the grantee is required to pay that estimated withholding to his/her company if they don't have enough cash compensation to offset it. I'm interested to hear how Cook gets around that $100m+ tax liability, but he has 5 years to prepare.