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Apple Paying Dividends to Employees with Restricted Stock Units, CEO Tim Cook Declines to Participate
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Very smart move on Cook's part. He gets to retain his squeaky clean business reputation, still makes buckets of money, and gets headlines that show him being specifically non-greedy. He also gets to avoid situations like the options scandal that plagued Jobs for a number of years.
I can also appreciate the classiness of declining the dividend. Under Jobs, a lot of people screamed for a dividend payout for years. It never happened. Had Cook not done this he may have appeared to be a disgruntled former underling who's first move as CEO is to give himself a big fat paycheck that the old boss didn't want to give. While it would certainly be untrue, it could easily be spun that way in the media.
Very smart guy this new CEO.
I can also appreciate the classiness of declining the dividend. Under Jobs, a lot of people screamed for a dividend payout for years. It never happened. Had Cook not done this he may have appeared to be a disgruntled former underling who's first move as CEO is to give himself a big fat paycheck that the old boss didn't want to give. While it would certainly be untrue, it could easily be spun that way in the media.
Very smart guy this new CEO.
What a bunch of self-entitled clap trap.
Retail employees get paid a wage, do they not? They are given adequate renumeration for their level of qualifications and amount of work they do, are they not?
The employees who are given stock options are given so as part of their renumeration It's a package they negotiated upon employment with the company. They negotiated the packages because they have a skill set and qualifications that make them valuable enough to be in a position of negotiation.
Don't like that, well tough titties. That's how a free labour market works. If you want to get paid the big bucks then I suggest you go and earn yourself the qualifications and skill set to go into the market and demand good renumeration.
As for the retail employees, if they are not happy with their current renumeration than I suggest they negotiate a better awards with Apple.
No one is 'entitled' to that money.
1.125 million RSUs? At current market value, that's well over 500 million dollars. It's easier to turn down a measly 75 million when you're 1/2 a billionaire.
OK so how many employee's are given restricted stock options.....yeah not frigging many. My guess would be employee's who earn far too much money for what they really do.
I think its unfair to say the retail employee's should leave if they are unhappy with the wage they get.
I think its the way Apple are happy to throw around millions of dollars to a few employee's and nothing to the people on the frontline taking **** day in day out from ignorant people like yourself.
Imagine if Apple took all that money Tim Cook doesn't want and they rewarded the whole company with that. Its wouldn't be the amount that would matter it would be the gesture of acknowledgment for a job well done.
Nice theory, but no. The dividend at issue is only for the non-vested stock. Cook no doubt owns lots of vested AAPL, for which he receives the same dividend as any other stockholder. Nobody in the media spun the dividend as self-serving if only because stockholders have been asking the board for one for years.
TYPICAL GREEDY SELFISH CEO!
oh wait...
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"Regular employees" get paid less because they contribute less. Yes, they do. Also, none of these employees are slaves, they are free to quit and find a better job.
Apple is, among other things, an employer, required by law to turn a maximum profit. They are not required to profit share. Get some skills if you want to earn more.
Or, we could just give handouts to the poor. Whichever one you want.
oh wait...
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"Regular employees" get paid less because they contribute less. Yes, they do. Also, none of these employees are slaves, they are free to quit and find a better job.
Apple is, among other things, an employer, required by law to turn a maximum profit. They are not required to profit share. Get some skills if you want to earn more.
Or, we could just give handouts to the poor. Whichever one you want.
I'm glad Tim is approaching the company in a much more humanistic way, but I really hope Apple will continue to muster a rock-solid vision and incredible products in the next several years.
I don't think anyone thinks taking $1 is selfless. It's a sign that someone has faith in his company. $3 billion is nothing compared to what Bill Gates made in his stock options and I don't see anything wrong with a founder of a company making $3 billion who turned around an almost bankrupt company into $500+ billion market cap company.
I'd love to see that law. And just because one doesn't have to pay more for something doesn't mean one can't (or shouldn't). It's not that large of a jump from "don't pay them any more than you have to" to "don't improve working conditions at Foxconn."
I don't think you're saying the latter, but it comes from the same attitude.
When last I took note, Mr. Cook owned about 14 thousand shares of AAPL (i.e. not including the more than 1 million yet-to-vest RSUs that you referred to and on which he has chosen not to receive dividend equivalents). It isn't likely that I would have missed a filing noting that he had acquired or disposed of additional shares, so unless he's done something very recently I'm pretty confident that he still owns only those approximately 14 thousand shares.
On a different note, and just to be clear: This decision by Mr. Cook (i.e. to not receive dividend equivalents on his RSUs) is not a recent one. I'm pretty sure it was stated during the conference call in which the new Apple dividend was announced that Mr. Cook had requested not to receive the dividend on his RSUs.
Why is everyone assuming this was some grand gesture of selflessness on Cook's part? Is there some tax benefit and/or helpful accounting treatment to Cook and/or Apple as a result of his declining of the dividend?
The dividend on an RSU is taxed as ordinary income, correct?
The dividend on an RSU is taxed as ordinary income, correct?
I would say I am impressed but CEO in general are massively over paid and that goes triple for the US were they are even more out of line than the rest of the world.
Sounds like you are recommending that retail employees unionize in order to negotiate or be in a position of negotiating.
As far as the "it's all about the skills you don't have" argument is concerned, I am pretty sure there are pointy-haired bosses at Apple who make 10-20 times what your average store employee makes...and, clearly, they are not 10-20 times more qualified, if they are more qualified at all.
I love making money and I can be a self-aware jerk because I am firmly on the side of those who have 5X the skills and 30X the wages, but when the wage factor reaches 60X, 70X, 100X, it would never come to mind to use the skill differential to explain the pay differential.
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If I had $10M in the bank, I would simply retire and enjoy life. When you got too much of something, it becomes useless and worthless to you.
Stock grant details (from Apple 2007 Proxy report):
Apple's CEO, Steve Jobs, currently holds approximately 5.5 million shares of Apple common stock. Since rejoining Apple in 1997, Mr. Jobs has never sold a share of Apple stock. His last equity grant was awarded in 2003, and vested in full in 2006. Mr. Jobs currently holds no unvested equity awards. In fiscal 2007, Mr. Jobs's entire compensation consisted of his $1 annual salary. Because Mr. Jobs's continued leadership is critical to Apple, the Compensation Committee is considering additional compensation arrangements for him.
Mr. Jobs has received a $1 annual salary since he rejoined Apple in 1997 and began serving as interim CEO. In 1999, Apple awarded Mr. Jobs an aircraft as an executive bonus in recognition of his outstanding performance during the previous two years. Mr. Jobs also received two stock option grants, one in 2000 and another in 2001. Mr. Jobs never exercised these grants, and they were both cancelled in March 2003, when Apple awarded Mr. Jobs a grant of 5 million shares of restricted stock.
The 2003 restricted stock grant required Mr. Jobs to remain employed by Apple for three more years before it vested. This grant, which increased to 10 million shares when Apple's common stock split in 2005, vested in full in March 2006. After a portion of these shares was withheld for the payment of taxes, Mr. Jobs received the remaining 5,426,447 shares. Due in large part to Mr. Jobs's leadership, Apple's stock price (after accounting for a stock split) increased from $7.47 on the March 2003 grant date to $64.66 on the March 2006 vesting datemore than an eight-fold increase in three years. Under Mr. Jobs's continued leadership, Apple's stock price increased from $64.66 per share in March 2006 to $189.95 per share as of October 31, 2007a three-fold increase in approximately 18 months.
When he was elected to Apple's Board of Directors in 1997, Mr. Jobs received the standard director's stock option grant for 30,000 shares. Because Mr. Jobs became employed later that year as Apple's interim CEO, he was no longer eligible for such director grants. When the 1997 director grant (which increased to 120,000 shares after two stock splits) was due to expire in August 2007, Mr. Jobs exercised the option and he currently holds these 120,000 share
His stock value may exceed $3B today, but it was worth a mere $37m when granted, and credit due to his leadership for the ROI.
They'll call the employees part of the 1% because they are educated. The so-called "99%" is full of idiots.
Well with Cook's RSU's annualized, Forbes lists his annual compensation at 14 million a year (remembering that he will not get the overwhelming majority of that for several more years). That places him at 109th on the compensation list. None of those ranked above him are managing a larger company and few if any are managing a faster growing company.
The top 5 highest paid CEOs in the UK would all be around 3-8 on the US list. Your assertion that it goes triple for the US does not seem to be backed by reality.
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The difference is how much value does a particular employee bring to the owners. It is not just tangible skills, there is a lot more to being an effective leader than "skills". Tim is effective and the shareholders make more money because he is CEO. What do you think the skill gap was between Scully and Jobs?