New Retail SVP Angela Ahrendts Receives Signing Bonus Worth $68 Million

chrono1081 said:

I don't get why everyone on this thread is bashing her when they haven't seen her even do anything yet.

Click to expand...

Come on, you know why this is. People react from their point of view of what a person is worth, based on what they earn themselves and what they think a person needs, while her salary has nothing to do with either.

A lot of it is jealousy (which they of course will deny).

huggyb said:

is anybody really worth that kind of signing bonus when they haven't even seen how she performs? So weird to me, imo.

Click to expand...

No. Nobody. And this is corporate America.

dysamoria said:

No. Nobody. And this is corporate America.

Click to expand...

Can you provide some reasoning to this, or is it just based on a feeling?

michaelsviews said:

NO ONE, absolutely NO ONE is worth this. And this is one of the reason's the economy is crap. Over inflated salary's.

Click to expand...

At least she does something. There countless celebrities and reality stars who make as much doing nothing other than working out and getting plastic surgery.

And don't get me started on baseball athletes, and coaches...

I find it sad that a discussion about this can only result in people resorting to:

• conservatism / liberalism scenarios
• unfounded personal feelings
• conspiracy theories
• 1% rhetoric
• etc..

We are three pages on, and no-one has been able to give any reason supported by solid argumentation why Ahrendts shouldn't earn that money if she succeeds in achieving the goals that Apple will have set her.

In all fairness, its not just Apple that pays people outrageous and inappropriate sums of money. There are actors, sports stars, CEO's and others that, for silly reasons, our society decides should receive the majority of our resources -- to spend on luxuries for themselves. The problem really lies will all of us, who allow this type of waste because we accept that there are people who are so much better than and more valuable than us--that they deserve to hoarde money.

I'm not saying those with more responsibility and talent shouldn't receive more money and therefore a more comfortable life, but this defies reason. There are a lot of hard working and productive people that don't get paid a living wage.

barkomatic said:

There are a lot of hard working and productive people that don't get paid a living wage.

Click to expand...

You are of course right, but there is no point in making that comparison.

Maybe this helps in understanding what is going on a bit:

· Below about USD 200,000* people are paid based on the production they run and how hard they work. Nothing wrong with that.
· Anywhere above USD 200,000 people are paid on the value they create for an organization. Stockbrokers generate profits and get paid a percentage of that. Movie stars and Basketball players etc generate income on marketability which doesn’t necessarily correlate to the actual productivity they exhibit.

Ahrendts falls in the second category. Her work will be coordinating the next phase of Apple’s retail store strategy. The calculated profit increase (and you can bet that she has designed a plan for that as part of her negotiations with Apple) will result in a percentage-wise return to her. It has to do with value and knowledge and is absolutely unrelated to her personal productivity.

There are only a few people on this planet that are able to generate billions for a company such as Apple. If Ahrendts is able to do that than it is within rights that the supply and demand mechanisms result in a bonus that is high enough to avoid her being poached away by the next company with a retail revamping strategy.

*depends on the industry, country and other variables, but this is the general idea.

sransari said:

I assure you, if Apple could have acquired her for cheaper, they would have...

Click to expand...

Exactly.

If she really wasn't "worth" that much, no one would pay her that much.

Apple has agreed to pay her that much because they crunched the numbers and projections and they strategically figured that she can bring them more than $68 million in new profits.

From the tone of some of these posts you would think that she was taking the money out of MacRumors user's personal bank accounts.

Ah, the wonders of gender-based affirmative action...

vartanarsen said:

Don't care who you are... Nobody is worth that much a signing bonus

Click to expand...

Let's say you are CEO of a retail company. You turned it around from a declining company into a profitable one, establishing your reputation as capable of managing a retail company.

You are literally the boss of the entire company. You can stay there and reap the benefits, collect your unvested stock grants and stock options, and probably receive more. You're set for life.

Another company offers you a job, albeit as a Senior Vice President. It's technically a demotion, but at a much larger company where the stakes are higher. You will be required to make decisions and direct strategy that can add (or subtract) hundreds of millions to the company's bottom line, each year.

If you succeed, you might get a promotion to a C-level position again. If you fail, you'll fail spectacularly. No one will ever hire you for a similar job -- even if the reason for your failure is out of your control (product problems, poor economy, a superior competitor).

What would it take for you to leave your current position? And, if you are willing to leave your CEO post, you are likely talking to more than one company -- including ones that are offering you a CEO position. What do you think they would offer?

From the company's point of view: they are hiring someone to make decisions and direct strategy that can add hundreds of millions to the bottom line each year. If she can do it, 10's of millions per year in compensation is is a fraction of the potential payback for the company -- and a great return on investment.

Wouldn't you invest in a stock if you were reasonably sure you would get a 10X return?

I would like to point out that $68 million won’t even get you .1% of an aircraft carrier. So it’s not really that much.

Yeah but if you got that money then it would been different story?

GeneralChang said:

Back on subject, I would like to point out that $68 million won’t even get you .1% of an aircraft carrier.

Click to expand...

You need to shop around more carefully for your aircraft carriers...

USS Gerald R Ford will cost approximately $13bn to construct, and here we may (or may not) be building two smaller carriers for little over $10bn the pair. Meaning she could afford roughly 0.5% of CVN-78, or 1.3% of a British carrier.

Were I her financial advisor, however, I would strongly caution her against following such a course of action.

Thats a nice pile of money

I think she's amazing for getting the role - wish I knew her secret as I've was never able to get past the interview stage for significantly better jobs, hence why I started my own business as I just couldn't make my skills and education pay.

Burberry is a niche fashion brand that primarily sells to the to the top 5% in society. Compared to most retailers they barely have any shops (there are I think about 4 in the UK) as there just aren't enough people rich enough to buy their wares.

Good on her for turning the brand around but Burberry is a hotdog stand compared to Apple Retail. I really don't know what makes her worth so much money. But then what the heck do I know - I'm just the guy that knew getting a prat from Dixons UK would be a disaster.

She can keep her 68 million. I'd be happy to accept those yearly dividend payments

----------

peterdevries said:

You are of course right, but there is no point in making that comparison.

Maybe this helps in understanding what is going on a bit:

· Below about USD 200,000* people are paid based on the production they run and how hard they work. Nothing wrong with that.
· Anywhere above USD 200,000 people are paid on the value they create for an organization. Stockbrokers generate profits and get paid a percentage of that. Movie stars and Basketball players etc generate income on marketability which doesn’t necessarily correlate to the actual productivity they exhibit.

Ahrendts falls in the second category. Her work will be coordinating the next phase of Apple’s retail store strategy. The calculated profit increase (and you can bet that she has designed a plan for that as part of her negotiations with Apple) will result in a percentage-wise return to her. It has to do with value and knowledge and is absolutely unrelated to her personal productivity.

There are only a few people on this planet that are able to generate billions for a company such as Apple. If Ahrendts is able to do that than it is within rights that the supply and demand mechanisms result in a bonus that is high enough to avoid her being poached away by the next company with a retail revamping strategy.

*depends on the industry, country and other variables, but this is the general idea.

Click to expand...

Are there any retail companies that can afford to pay a 68 million bonus though? Maybe WALMART - but I doubt they would spend that much even if they could afford it.

----------

GeneralChang said:

I would like to point out that $68 million won’t even get you .1% of an aircraft carrier. So it’s not really that much.

Click to expand...

And you'd want an aircraft carrier yourself because?

----------

peterdevries said:

You are of course right, but there is no point in making that comparison.

Maybe this helps in understanding what is going on a bit:

· Below about USD 200,000* people are paid based on the production they run and how hard they work. Nothing wrong with that.
· Anywhere above USD 200,000 people are paid on the value they create for an organization. Stockbrokers generate profits and get paid a percentage of that. Movie stars and Basketball players etc generate income on marketability which doesn’t necessarily correlate to the actual productivity they exhibit.

Ahrendts falls in the second category. Her work will be coordinating the next phase of Apple’s retail store strategy. The calculated profit increase (and you can bet that she has designed a plan for that as part of her negotiations with Apple) will result in a percentage-wise return to her. It has to do with value and knowledge and is absolutely unrelated to her personal productivity.

There are only a few people on this planet that are able to generate billions for a company such as Apple. If Ahrendts is able to do that than it is within rights that the supply and demand mechanisms result in a bonus that is high enough to avoid her being poached away by the next company with a retail revamping strategy.

*depends on the industry, country and other variables, but this is the general idea.

Click to expand...

Spot on.

To me, no matter how little or how much you make, you'll always find yourself wanting more. I always said when I was around 18, if I could make 200k a year, I'd be super happy. But looking back, and having consistently made more money with each company I worked for - I ended up increasing my cost of living (bought a second car to toy around with) and live in a well-maintained apartment complex with salt-water pool, tennis, basketball, volleyball courts, gym, etc.

While my savings is still 20% annually, you tend to live better and consume that extra income.

However, if you make 10s of millions per year, does the inflow of money eventually surpass the ability to spend as quick? I can't see myself ever spending 1 million a year, nevermind 10 million.

oliversl said:

Thats a nice pile of money

Click to expand...

It's nice to not have do worry about whether to buy a Bugatti Veyron, Porsche 918 Spyder, or Lamborghini Veneno Roadster. Just buy one of each, hell maybe even a Ferrari or Rolls Royce would look nice in the garage too.

No single person adds 68 million dollars worth of value to ANY corporation merely by signing up employment contract. NO ONE!!!!

unplugme71 said:

Are there any retail companies that can afford to pay a 68 million bonus though? Maybe WALMART - but I doubt they would spend that much even if they could afford it.

Click to expand...

Many: Inditex (Parent of Zara and Massimo Dutti), Walmart (indeed), Target, JC Penney (well maybe not anymore), Hennes & Mauritz etc etc.

Whether they would is another matter.

class77 said:

No single person adds 68 million dollars worth of value to ANY corporation merely by signing up employment contract. NO ONE!!!!

Click to expand...

Please read the article properly . She doesn't get 68 Million to sign the contract.

1. It is paid in installments to reward the success of her strategy. No success = no shares.
2. Before she received the contract, she will have to have designed a framework strategy already and a clear business case. Not delivering = getting fired= no shares. Remember Browett?

You clearly have no idea how these things work. If you do, then please explain how it is impossible that Ahrendts will not be able to add value in excess of 68 million dollars.

unplugme71 said:

And you'd want an aircraft carrier yourself because?

Click to expand...

Because aircraft carrier. Why do I need a reason to want one of those? That being said, I’d much rather see a mission sent to Mars, but that costs significantly more than the 13-14 billion it costs to build a carrier.

peterdevries said:

I find it sad that a discussion about this can only result in people resorting to:

• conservatism / liberalism scenarios
• unfounded personal feelings
• conspiracy theories
• 1% rhetoric
• etc..

We are three pages on, and no-one has been able to give any reason supported by solid argumentation why Ahrendts shouldn't earn that money if she succeeds in achieving the goals that Apple will have set her.

Click to expand...

I made a solid and factual argument for another aspect of this compensation strategy. Nobody responded.

So that's the way it goes hereabouts.

peterdevries said:

You are of course right, but there is no point in making that comparison.

Maybe this helps in understanding what is going on a bit:

· Below about USD 200,000* people are paid based on the production they run and how hard they work. Nothing wrong with that.
· Anywhere above USD 200,000 people are paid on the value they create for an organization. Stockbrokers generate profits and get paid a percentage of that. Movie stars and Basketball players etc generate income on marketability which doesn’t necessarily correlate to the actual productivity they exhibit.

Ahrendts falls in the second category. Her work will be coordinating the next phase of Apple’s retail store strategy. The calculated profit increase (and you can bet that she has designed a plan for that as part of her negotiations with Apple) will result in a percentage-wise return to her. It has to do with value and knowledge and is absolutely unrelated to her personal productivity.

There are only a few people on this planet that are able to generate billions for a company such as Apple. If Ahrendts is able to do that than it is within rights that the supply and demand mechanisms result in a bonus that is high enough to avoid her being poached away by the next company with a retail revamping strategy.

*depends on the industry, country and other variables, but this is the general idea.

Click to expand...

Ah yes, one hears this a lot. Enormous salaries are justified because of the "value" one brings to the company. An entirely subjective standard that is often completely contradicted when a high level executive is terminated either for under performing or because of a behavioral issue--they still get their money regardless.

What is the definition of "value"? Is your life valuable? Is the teacher of your children valuable? Executives aren't special unicorns of talent -- there are millions of people that could do their jobs. What is unique about them is their *access* to these roles and their position in the society that awards them.

I'd argue that Kim Kardashian adds no value to our society--yet gets access to enormous resources to squander on herself. Anyway, this situation isn't unique to this time period or to the U.S. obviously. However, the sheer scale of the misappropriation of resources and what we "value" seems to be increasing.

IJ Reilly said:

I made a solid and factual argument for another aspect of this compensation strategy. Nobody responded.

Click to expand...

You mean the one about not being able to hit a fastball?

ptb42 said:

You mean the one about not being able to hit a fastball?

Click to expand...

That too.