Apple Awards Tim Cook 1,000,000 Shares of Stock as CEO Bonus

[vvebsta]

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Come on guys he totally deserves this bonus. After all he's been rescuing children from burning buildings, curing cancer, fending off hurricanes, fixing our economy, and solving world hunger.

 

[SirHaakon]

It is just like slagging on Apple for doing contract manufacturing in China. Hello, reality calling. Everyone does that.

Oh, well if everyone's doing it, it must be okay.

 

[twoodcc]

wow, $383 million bonus. dang

 

[vincenz]

That's some bonus you've got there Mr. Cook. Hopefully you live up to it..

 

[karlwig]

In connection with Mr. Cook's appointment as Chief Executive Officer, the Board awarded Mr. Cook 1,000,000 restricted stock units. Fifty percent of the restricted stock units are scheduled to vest on each of August 24, 2016 and August 24, 2021, subject to Mr. Cook's continued employment with Apple through each such date.​

Mr. Cook, meet Mr. Incentive. Mr. Incentive, meet Mr. Cook.

On the other hand, if someone needs a 383,000,000 dollar bonus to be motivated enough about taking the job as CEO of Apple, one could ask just how much they wanted the job in the first place.

I realize the money is also for getting him to stay with Apple, yes. But if it was me, or most others I guess, getting a yearly multi-million dollar salary and being the ruler of one of the biggest and most innovative tech companies in the world would do planty for my motivation to stay.

You'd think these incredibly rich, successful people, as they're getting older, at some point would find incentives for doing stuff in something other than just more money. It just seems so boring to be so rich and yet having that as your drive. But apparently it does work!

 

[Cartaphilus]

What makes Cook any more unique than anyone else with a similar education? Some kind of stereotype about better style or taste? Until he proves himself capable, he's just another guy to me. Giving him a bonus before he even takes over is absurd, IMO.

Your interesting socio-economic notions notwithstanding, you should understand that Cook is more qualified for the job than anyone else with a similar education because he uniquely has been the acting CEO of one of the most valuable public companies for some time now, and has demonstrated, among other things, a unique ability to manage Apple's supply chain to meaningfully increase Apple's profit margins and product availability, while coincidentally depriving potential competitors of access to scarce components. (Incidentally, there are no degrees of uniqueness; one is either sui generis or not.)

In any event, he was not given a bonus; he was granted Restricted Stock Units. These will result in the delivery to him of actual stock in five and in ten years provided that Cook satisfies the conditions of delivery, principally that he remains an employee of the Company until the delivery date. Cook will not be able to satisfy this contingency unless he performs very well as CEO for five years to receive the first half-million shares and for ten years to receive the second equal installment.

I am sure that you will agree that if the Board believes Cook has essentially and uniquely contributed to an increase in shareholder value over the period by significantly more than the then value of the shares he stands to receive, that the shareholders of Apple will be happy to retain his services and to dilute their own ownership by issuing the stock Cook will have earned.

Would you advocate passing a law that makes it illegal for the owners of a company to issue stock to their most valuable employee unless the value of that stock added to any other compensation is less than some fixed number, or less than some arbitrary multiple of what the company pays some other employee it regards as not only less valuable, but easily replaceable at the same or lower wage?

And if such a law were adopted following your advice, to which country unburdened by such a law do you think an extraordinary manager like Tim Cook would emigrate to? And in which such country would the owners of a public corporation like Apple reincorporate? And if such companies relocate their headquarters to other countries, what do you expect happens to the jobs of many of their American employees?

It is all well and good to remake the world, and it has been a privilege of college sophomores for generations to dream of a fair world where everyone works moderately hard for about the same reward. Despite the best efforts of college sophomores everywhere, extraordinarily talented, inventive, creative, driven, or just plain lucky individuals have always enjoyed extraordinary wealth. Let me suggest that it is far more possible, and far more useful, to design some fair means for assuring that no one is deprived of some minimum standard of living than to ensure that no one exceeds some maximum.

Perhaps such a position may also be ridiculed, but at least it is not ridiculous.

 

[Rocketman]

In connection with Mr. Cook's appointment as Chief Executive Officer, the Board awarded Mr. Cook 1,000,000 restricted stock units. Fifty percent of the restricted stock units are scheduled to vest on each of August 24, 2016 and August 24, 2021, subject to Mr. Cook's continued employment with Apple through each such date.
Mr. Cook, meet Mr. Incentive. Mr. Incentive, meet Mr. Cook.

On the other hand, if someone needs a 383,000,000 dollar bonus to be motivated enough about taking the job as CEO of Apple, one could ask just how much they wanted the job in the first place.

I realize the money is also for getting him to stay with Apple, yes. But if it was me, or most others I guess, getting a yearly multi-million dollar salary and being the ruler of one of the biggest and most innovative tech companies in the world would do planty for my motivation to stay.

You'd think these incredibly rich, successful people, as they're getting older, at some point would find incentives for doing stuff in something other than just more money. It just seems so boring to be so rich and yet having that as your drive. But apparently it does work!

Few seem to have noted the bonus is "for" Apple, paid to Cook on an "incentive" with delayed effect. Worth $0 today. Worth mint+ tomorrow less currency devaluation. Inflation is not a factor.

Rocketman

 

[Cartaphilus]

Worth mint+ tomorrow less currency devaluation. Inflation is not a factor.

Rocketman

How would devaluation occur? Since at least 1971 the U.S. dollar has been a floating currency, and devaluation can only affect a currency when its value is fixed by the monetary authority applying an exchange rate to the currency of some other country.

The dollar could be depreciated between now and the delivery date, i.e., it could require more dollars to buy other currencies than it does today, but since Cook will receive Apple stock, and not dollars, then presumably depreciation would simply result in his being able to sell his stock for a greater number of dollars than had there been no depreciation, with the buying power of the proceeds remaining roughly constant.

In this case, inflation would likely also have occurred, and certainly the prices of anything imported into the United States would have an inflated price. Assuming that the country continues to import most of its energy in the form of foreign oil, the inflated price of foreign-sourced energy would undoubtedly ripple through the domestic economy causing general price inflation and the concomitant reduction in the buying power of the U.S. dollar even for domestic goods and services.

Presumably Apple could in this event recover the increased dollar-denominated costs by raising its prices. Since Apple sources a significant portion of its components (and even assembly) overseas, in the absence of hedging strategies Apple's costs in dollars would increase. At the same time, Apple would derive a benefit from the higher dollar value of its overseas sales which already today accounts for more than half of its sales.

Except to the extent that Apple's profits are constrained by an inability to raise prices in its U.S. markets to offset increased dollar-denominated costs to the extent not offset by higher dollar-denominated foreign sales, the value of Apple's stock expressed in constant buying power dollars should not decrease because of inflation, devaluation, or depreciation.

In any event, I'm not sure Tim Cook was all that worried to begin with.

 

[Rocketman]

How would devaluation occur? Since at least 1971 the U.S. dollar has been a floating currency, and devaluation can only affect a currency when its value is fixed by the monetary authority applying an exchange rate to the currency of some other country.

The dollar could be depreciated between now and the delivery date, i.e., it could require more dollars to buy other currencies than it does today, but since Cook will receive Apple stock, and not dollars, then presumably depreciation would simply result in his being able to sell his stock for a greater number of dollars than had there been no depreciation, with the buying power of the proceeds remaining roughly constant.

Because of "monetary" inflation.

 

[MagnusVonMagnum]

Despite the best efforts of college sophomores everywhere, extraordinarily talented, inventive, creative, driven, or just plain lucky individuals have always enjoyed extraordinary wealth. Let me suggest that it is far more possible, and far more useful, to design some fair means for assuring that no one is deprived of some minimum standard of living than to ensure that no one exceeds some maximum.

That "minimum standard" is precisely what certain wealthy people and their grand old party has been fighting tooth and nail every since minimum wage was introduced. You cannot live on ~$7 an hour unless you're sharing a room with a couple of more people (i.e. living at home) and even then it's a joke. Yet they say that's too much money. Businesses can't afford to pay minimum wage so they have to do with less people. These are often the same businesses that are raking in record breaking profits. It's just not enough. They want more. So cut all health care benefits. If you get sick, you don't need to see a doctor. After all, there's ten more guys waiting to replace you. You're expendable, so if you die, who gives a crap? I'll hire someone else.

I'm sorry, but that is the reality of morality, ethics and business today. Your life means jack. Profit is everything and by profit, I mean for the upper echelon and the stock holders. No one else sees squat. If you as a regular worker do a great job, it's your boss that gets the freaking bonus, not you. The supervisors and management sit on their fat butts while labor does all the work and they get the bonuses for increased productivity, decreased overtime, etc. while you work harder for less. It's a freaking joke. But you can't strike. You're not union and they'll just fire you and find someone else. If you are union and you're government, you also probably can't strike because it's either illegal to do so or they just removed your union rights with a vote to convince people YOU are the reason the government isn't coming in under budget, not the people at the time that won't stop wasting money. They are allowed unlimited money to lie, cheat and steal to get votes.

Who's going to hear the average person when the rich have all the advertising money to run smear campaigns, use massive spin, tell lies and downright flood the idiot box with endless propaganda and since most people don't care to investigate on their own, it's easier just to believe any BS on the news, particularly if you're a right-wing fundamentalist and God wants you to be rich and hate the lazy poor who are using your tax dollars (after all you pay more straight up than any poor people with little income) to do drugs and collect welfare all day long! Screw that! No taxes for the rich! Let the poor pay for their own welfare! Better yet let nature's lesson of dog eat dog take its course and let them fend for themselves! We don't need OSHA or any regulations. WTF cares if someone dies building a bridge? There's another 10 people waiting in line to get that same job, especially during recessions and depressions. They're just cattle and easily replaceable. And that goes for college graduates as well. I can hire 3-4 Indians for the price of one American Computer Science graduate. Do you seriously think I'm going to hire an American? Bullcrap. Excess the job or bring in a worker program so I can pay the Indian 1/3 what I'd pay one American to do it and no health care costs!

 

[janil]

The value of the unrestricted stock that Cook receives as a result of the grant of the RSUs will be ordinary income to him in the taxable year when the shares are delivered, and he will pay taxes at the same rate applicable to wages or salaries on whatever the fair market value of the shares is as of the delivery date. Any increase in their value after that time will be treated as capital gain and, providing he satisfies the then-applicable minimum holding period and the law remains unchanged, taxed at a lower rate.

That is correct.. thanks for the reminder and explanation. When I exercised stock options in the past it was taxed as income for the increase over the exercise price.

Anything that's kept after that initial exercise point, though, will be short or long term capital gains.

One question I have is why the stock options today seem to be given with an initial price of zero (so giving them away) instead of simply giving the grantee the right to purchase the shares at the current stock price.

One thing I don't understand is that money can't really be a primary motivation for Cook and other executives-- they have more than they will ever need to live. Being an executive takes enough energy and time it has to be something they love doing for itself... so the money (huge as it is) is just a small benefit.

Because of this, I don't understand why Apple (and other companies) think they benefit by compensating their executives at the level they do.

 

[Cartaphilus]

Because of "monetary" inflation.

There is no such thing as monetary inflation. There is only inflation or depreciation.

The increase in the M0, as indicated by the graph, shows a dramatic growth during the period from January, 2007 to January, 2010, much of it due to Fed actions aimed at stimulating the economy. Nonetheless, inflation (CPI-U) during that same period averaged 2.35% per year, hardly any cause for concern. At one time, particularly during the years between the world wars, the monetarist school of economic posited a direct relationship between the money supply and prices. Empirical evidence has shown, however, that increasing the M0 has little effect on prices, or inflation. Technically, the fallacy is a failure to fully understand what affects velocity, but in practical terms it means that consumers holding on to their cash, depositing it in banks and other M0 components, are reducing spending. Inflation is a function of supply and demand, and when an economy is in recession, there is little demand. Increasing the M0 will not persuade a consumer whose house and investments have lost value, who is newly adverse to incurring debt, and who is worried sick about losing his job to go on a spending spree.

The markets certainly agree that inflation is not an issue. Surely were inflation in the offing at a rate anywhere close to the rate of growth of the M0, no one would buy a five-year treasury bond with less than a 1% yield or a ten-year treasury with a 2.22% yield. The specter of inflation due to monetary policy is a bogeyman, and like all bogeymen it scares only the ignorant.

If Tim Cook or anyone else is worried about "monetary inflation" they should take out all the loans anyone will give them at current fixed interest rates. They could then easily pay back the loans with the inflated dollars they will be earning in the future. The fact that few want to take out loans--or to buy things, or to invest in property, plant and equipment, or to hire new employees--is the reason inflation will remain low until something other than monetary policy stimulates the economy. Dropping interest rates close to zero and providing easy money has done little to spur the economy, and an un-spurred economy will never produce inflation.

Now, depreciation--the decline of the value of the dollar relative to other world currencies--is a function of the relative performance of the economy of each nation. (Actually, the dollar's role as a reserve currency insulates it to some degree even from this principle.) Since we are in a global recession, the economies which support the euro are faring no better than that of the U.S. Consequently, the exchange rate between the dollar and euro was not very different in January 2010 from what it was in January 2007. Even where the underlying economy is strong, as in China, the Chinese Yuan Renminbi is a fixed currency, tied to the dollar (albeit somewhat more loosely lately), so there is little relative depreciation despite a roaring Chinese economy struggling with inflationary pressures. For China it is very important to keep its exchange rate relative to its trading partners low, so as to keep its exported products cheap. Again, though, there is no correlation between M0 and exchange rate. The Swiss franc, the currency you choose to prove such a correlation, is issued by the world's 27th largest economy. But even Switzerland, once a redoubt of monetarism, now manages to the three-month LIBOR in accordance with the SNB's statement of monetary policy. They are not philosophically opposed to increasing their money supply. In fact, the SNB increased its monetary base over the same 2007 to 2010 period from 44 billion to 90 billion CHF, essentially doubling its M0. Yet the exchange rate between the two currencies was about the same at the beginning of 2010 as it was at the beginning of 2008--and remember that efforts to address the housing finance crisis and the resulting liquidity crisis did not begin until the fourth quarter of 2008. Switzerland does attract, because of its historically investor-friendly, no-awkward-questions-asked policies, a great deal of foreign investment which it holds in its bank vaults, and which contributes to its reputation of having a sound currency. It is certainly considered one of the currencies of refuge, but not because the Swiss constrain their monetary base.

Accordingly, I don't think Tim Cook needs to worry that because the St. Louis Monetary Base has risen there will be inflation or depreciation or that the buying power of one million shares of Apple stock will be diminished.

 

[Cartaphilus]

One question I have is why the stock options today seem to be given with an initial price of zero (so giving them away) instead of simply giving the grantee the right to purchase the shares at the current stock price.

One thing I don't understand is that money can't really be a primary motivation for Cook and other executives-- they have more than they will ever need to live. Being an executive takes enough energy and time it has to be something they love doing for itself... so the money (huge as it is) is just a small benefit.

Because of this, I don't understand why Apple (and other companies) think they benefit by compensating their executives at the level they do.

I think FASB policy may be encouraging the use of RSUs, particularly for companies with high volatility in their stock price. Stock options have to be recognized as an expense when the options are granted. The amount of the expense is the "fair value" of the option, usually calculated by the Black-Scholes model. If the stock of the company has fluctuated significantly, the expense can be very significant. Additionally, there is no assurance that the employee will ever receive as much value for the option as the company was obliged to expense. In the case of RSUs, though, the company will recognize the expense as the fair market value of the stock units as of the date of issuance and spread it over the vesting period. So Apple would recognize one-tenth of $383 million each year as compensation-related expense for Tim Cook's RSUs. I haven't run B-S on what Apple five- and ten-year options could be granted at the same expense for Apple, but my intuition is that for the same expense Apple provides a greater benefit for its employee by issuing RSUs, and that is the motivation.

By the way, when the shares are eventually delivered, the company will generally net out the income taxes due (or at least the minimum), so the employee can receive a lesser number of shares, but free of tax obligation.

I can't say I have any insight into why Apple thinks it's necessary to compensate Cook at that level, but my guess would be that it wants to make it very difficult for Cook to decide to leave Apple, and that the cost of the dilution to Apple shareholders is easy to justify. I wish I could speak from personal experience just how much adding $383 million to $80+ million affects motivation or performance. Maybe it's just how guys at this level keep score.

 

[Cartaphilus]

That "minimum standard" is precisely what certain wealthy people and their grand old party has been fighting tooth and nail every since minimum wage was introduced. You cannot live on ~$7 an hour unless you're sharing a room with a couple of more people (i.e. living at home) and even then it's a joke. Yet they say that's too much money. Businesses can't afford to pay minimum wage so they have to do with less people. These are often the same businesses that are raking in record breaking profits. It's just not enough. They want more. So cut all health care benefits. If you get sick, you don't need to see a doctor. After all, there's ten more guys waiting to replace you. You're expendable, so if you die, who gives a crap? I'll hire someone else.

I'm sorry, but that is the reality of morality, ethics and business today. Your life means jack. Profit is everything and by profit, I mean for the upper echelon and the stock holders. No one else sees squat. If you as a regular worker do a great job, it's your boss that gets the freaking bonus, not you. The supervisors and management sit on their fat butts while labor does all the work and they get the bonuses for increased productivity, decreased overtime, etc. while you work harder for less. It's a freaking joke. But you can't strike. You're not union and they'll just fire you and find someone else. If you are union and you're government, you also probably can't strike because it's either illegal to do so or they just removed your union rights with a vote to convince people YOU are the reason the government isn't coming in under budget, not the people at the time that won't stop wasting money. They are allowed unlimited money to lie, cheat and steal to get votes.

Who's going to hear the average person when the rich have all the advertising money to run smear campaigns, use massive spin, tell lies and downright flood the idiot box with endless propaganda and since most people don't care to investigate on their own, it's easier just to believe any BS on the news, particularly if you're a right-wing fundamentalist and God wants you to be rich and hate the lazy poor who are using your tax dollars (after all you pay more straight up than any poor people with little income) to do drugs and collect welfare all day long! Screw that! No taxes for the rich! Let the poor pay for their own welfare! Better yet let nature's lesson of dog eat dog take its course and let them fend for themselves! We don't need OSHA or any regulations. WTF cares if someone dies building a bridge? There's another 10 people waiting in line to get that same job, especially during recessions and depressions. They're just cattle and easily replaceable. And that goes for college graduates as well. I can hire 3-4 Indians for the price of one American Computer Science graduate. Do you seriously think I'm going to hire an American? Bullcrap. Excess the job or bring in a worker program so I can pay the Indian 1/3 what I'd pay one American to do it and no health care costs!

If you're right, all it takes to change the situation is for the majority, who are either in the position you describe or sympathetic to those who are, to vote for candidates who advocate policies that will help their situation, as is the case in most of Western Europe and Scandinavia. Here, though, many of them support the Tea Party, the Fair Tax, and conservative Republican candidates. Why?

 

[Bytor65]

If you're right, all it takes to change the situation is for the majority, who are either in the position you describe or sympathetic to those who are, to vote for candidates who advocate policies that will help their situation, as is the case in most of Western Europe and Scandinavia. Here, though, many of them support the Tea Party, the Fair Tax, and conservative Republican candidates. Why?

This is indeed the baffling issue of our times. How those making minimum wage or near it, vote for those who would lower it. How Social Democracy has been demonized when it should be a goal for enlightened societies everywhere.

After Warren Buffet said it was time for the wealthy to stop getting tax breaks. The right wing spin machine quickly answered that no it was wrong to tax "Job creators" and that the poor were not paying enough taxes. Yes minimum wage earners were not paying enough taxes. My head almost exploded.

How far can this insanity go while still getting support from the very people they are sinking?

 

[MagnusVonMagnum]

If you're right, all it takes to change the situation is for the majority, who are either in the position you describe or sympathetic to those who are, to vote for candidates who advocate policies that will help their situation, as is the case in most of Western Europe and Scandinavia. Here, though, many of them support the Tea Party, the Fair Tax, and conservative Republican candidates. Why?

People are centrists. They just want fair and even. Politicians are extremists pushing radical agendas away from the people they're supposed to represent. This is because they are financed by rich people with agendas, whether it's the corn growers of America pushing USELESS Ethanol that raises corn prices and lowers your fuel economy at the same time or Wall Street firms pushing for no taxes and even bonuses to move jobs overseas so they can buy another vacation home and a new Ferrari. The average person is stuck in the middle of battling giants, knowing the one side is against the rich, but for agendas they may not be ready to support (rural communities with old-fashioned values have a hard time with gay marriage, for example) and they cannot seem to keep their spending under control which is bankrupting America.

The other side tells them what they want to hear, but then keeps screwing them over once they get elected and when they get booted out, they start smooth talking again and they fall for the same spiel every darn time. That one I cannot figure out. It's like the woman who keeps going back to the boyfriend that beats her up.... They eventually bankrupt the country in a different way (e.g. running costly wars that benefit small groups like Halliburton in a huge way) and running risk programs that nearly bankrupt every bank in the country. They then bail out the banks so they can start screwing us all over again and leave the middle class in ruins with no jobs, no union to protect those jobs and the debt of the people that don't even want to work period soaking up the programs that do exist for the less fortunate. How do you get a middle class American to vote for the rich? By emphasizing that the poor don't work and live off their taxes! NO ONE likes that. They tell them that they should want to be rich and once they become rich, they can join the good 'ole boy club too! Similar goals = similar votes even if you're currently in the wrong demographic.

Republicans are GREAT at spin and propaganda with (until recently with the tea party) a UNITED front. They're telling you what you want to hear. They're telling you that it's the rich and businesses who create jobs and so tax breaks make sense for those people since otherwise they will just hoard their cash and the good old USA will go further into a Great Depression. They tell you that they don't kill babies and God loves only them and if you don't want to burn in Hell, you better vote for real Christian candidates (and if they don't say it directly, the churches people attend sure as heck often tell it for them). This is why my fundamentalist brother votes Republican and he has a 4-year Computer Science degree (and already lost one job to India outsourcing). Shows like Glen Beck have been capitalizing on that religious aspect the past couple of years. Most right-wing Christians cannot abide left-wing platform tiers like gay rights and welfare for those that don't even want to work. That irks them and so they'd rather put up with losing jobs than supporting things they don't like.

Democrats are not a united front, often fight amongst themselves (because they're so different) and represent a LOT of different movements, many often which conflict with rural American values. There is a segment in America, for example, which will NEVER vote for someone that supports abortion or a party that generally does on that issue alone. So it doesn't matter what else the Republicans believe in, they already have their vote. But the good old white boy network knows what they believe in. Money and keeping themselves on top of food chain. It's simply not what they talk about. They talk about patriotism, God, prosperity, low taxes, etc. which people do want to feel good about. But you should judge by actions, not words, but people seem to have awfully short memories and Republicans take advantage of that by spinning things after people forgot the details until history reads completely differently a few years later.

And there is no party that supports centrist leanings. Obama is a centrist and he gets beat up by both sides. A lot of people still like him because he's in the middle, but almost no one else on Capitol Hill is. They're in government because they don't like the middle and are extremist enough to try and do something about it. Ordinary people don't want to run for office. they don't have the money and would be serving someone else who does. Better to just sit down, eat a Twinkie and turn on Jerry Springer....

 

[mrxak]

So many communists on MacRumors.com...

He's not getting 400 million dollars because he got promoted. Even if that was the case, I don't think I'd object. A man this talented, particularly since his leaving Apple would hurt Apple, would be an amazing steal for a competitor, or really any company of a certain size. He's a talented man and headhunters would love to nab him for their companies. Apple giving him conditionally 100,000 stock a year for ten years simply a means for Apple's board to reassure stockholders, employees, and Tim Cook himself, that all parties are thrilled, and Tim Cook will be CEO of Apple for a long time. This creates stability, gives added incentive to Tim Cook to keep Apple stock climbing, and is overall a good thing for everyone.

There are people who think 400 million dollars is too much for any one man to have. You are entitled to your opinion, but the marketplace has its own value for men like Tim Cook, and that, whether you like it or not, is in the hundreds of millions of dollars. Why is Tim Cook worth giving a million Apple shares to? Because if Apple didn't, somebody else would, plus or minus other incentives and costs, because big companies worth billions of dollars think Tim Cook is worth having at this price. They actually think he's worth more than that. After all, they expect to profit on this deal.

This sounds like a circular argument, and it is. But that's how capitalism works. You pay for a good at the price it's valued at, because it's valued at the price people are willing to pay. If it helps, think of it as an auction, though it's rarely so formal. Huge executive salaries do not occur in a vacuum. This is not Apple being generous, this is Apple paying what the man is worth on the open market for his labors.

Intellectually, we can say that Tim Cook is getting more money than is reasonable for any individual to have, but we cannot say that he is getting more than he deserves. The fact of the matter is, Apple will profit from paying Tim Cook for his work. They are giving him 100,000 shares a year (which he has no access to until 5/10 years later), because they expect him to make above and beyond that for the company in terms of share value. It is a bit of a gamble, sure, he may tank the stock, at which point the board of course can remove him. He won't get any shares at all in that case, if it's before 5 years, and only half if it's before 10. This deal incentivizes him to increase the stock price, at which point, yes, he'll have earned every penny of his million shares' stock value.

More money than is moral for him to have? Perhaps, but then you should be encouraging him to be philanthropic. Simply wanting Apple to not pay executives what other companies are willing to pay is an argument that will never work in a competitive environment, and the fact of the matter is executives of successful companies make their companies successful and it only makes sense they should have a stake in those companies for their work. Your moral argument is not against executive compensation, it is actually against corporations growing above a certain size, at which point I find it hard to see how morals come into play at all. Corporations are amoral entities, fine. That's different than immoral though, and there is nothing stopping individuals working in a corporation to act morally themselves.

More money than he deserves? Mathematically false. He will either replace his cost to the company and then some, or Apple will find somebody who can and replace him. This is true of any employee in any profit-making enterprise. A corporation profits from the work of the employees, or there is no point in its existence. A man like Tim Cook, working solely for himself, would, Apple's shareholders expect, produce income in excess of his compensation. Perhaps a self-employed Tim Cook would make billions of dollars a year. Instead, he'll make it for Apple, minus his compensation. Why isn't Tim Cook self-employed and taking over the world then? Because there are intangible benefits that cannot be bought. His enjoyment working with the people he gets to work with, the pride working for a company like Apple, the sense of history he feels every day he walks into the building, and things I'm sure only Tim Cook can know about or will discover.

 

[Cartaphilus]

I agree with both Magnus and mrxak

 

[MagnusVonMagnum]

So many communists on MacRumors.com...

That's the other thing the right-wing does all the time. Any time someone complains that the system is out of whack (due to manipulation using endless monies to make it so), they get called "Communists" YET whom do these very same people want to trade with and move all the jobs overseas to? CHINA. The biggest most powerful nuclear armed COMMUNISTS in the world. What a steaming pant load of BS HYPOCRISY.

This sounds like a circular argument, and it is. But that's how capitalism works. You pay for a good at the price it's valued at, because it's valued at the price people are willing to pay.

You mean the same 'capitalism' whereby oil and even coffee prices are hugely inflated beyond the normal market demands due to rich speculators gambling on their value? The same forces that caused the housing crisis, ran gas up to over $4.50 a gallon, have doubled coffee prices recently and ran gold to an all-time panicked high of almost $2k a flipping OUNCE? I don't know what Capitalism and Communism YOU learned about in school, but the Capitalism I read about was supposed to benefit consumers through competition and choice, not screw them all to hell through market manipulation, panicked news broadcasts and outright lies.

find it hard to see how morals come into play at all. Corporations are amoral entities, fine. That's different than immoral though, and there is nothing stopping individuals working in a corporation to act morally themselves.

Corporations are not living entities, dude. They are run by PEOPLE who do (supposedly) have consciences and morals and souls. The fact they are run without any sign of those and any fairness to the people lower on the chain and every possible manipulation to pay workers less, not abide safety concerns (because they cost more money to implement) and move jobs to countries that will tolerate virtual slave labor environments speaks volumes about the integrity and lack of honor in the people running these companies. I can only have faith that there IS a God somewhere up there and that these "amoral" individuals one day learn exactly what they've sewn and the devastating effects their decisions to make a few people more millions have had on the working families whose lives they destroyed all in the name of higher profit margins.

 

[AidenShaw]

No honeymoon, it seems.

From all the negative comments, it looks like Tim Cook won't have a "honeymoon period" as CEO.

The stock grant seems to grate against many people's utopian idea of the 70's Apple - and the previous CEO's famous $1/year salary.

Poor Tim, $60m/year isn't enough....

 

[DAVIDUGLY]

Get out there and go for it.

 

[tgc]

Interesting.

Interesting reading forum posts ... no matter what you say, someone else has an equal and opposite opinion. Doesn't matter what the subject.

If someone says he deserves more money than most of us could even consider spending in our lifetime, someone says he's worth every penny.

It's a wonder we can live next to each other.

Oh wait...

 

[AaronEdwards]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_5 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8L1 Safari/6533.18.5)

There should just be a worldwide agreement that every time a CEO gets a million+ dollar bonus everyone in the world gets a loaf of bread.

Edit: Ok maybe not everyone... If there's 6.9 billion people in the world at a little more than a dollar a loaf it would cost quite a bit. Maybe every family gets a loaf of bread. The point is we all get bread when some CEO gets a bonus.

You can't placate the masses with just bread.

You forgot the circuses.

 

[taptic]

*randomly resurrects old thread by saying*

NOOOOOOOOO! I hope he isn't as boring as he has been so far all the way until 2021.

 

[s2mikey]

Tim deserves it, he is the CEO

Well, deserves is debatable. And, he's not exactly very exciting. Guy is mainly on cruise control and has been since day one. Nothing he's doing is really making apple any better, IMO.

He's not hurting it but he's just a warm body to parade out there for product launches. Nothing more.