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Apple Awards Executives 1,000,000 Shares of Stock to Stay Until 2016
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Economics is not a zero-sum game. Allowing high-earners to keep 90% of their earnings does not in any way reduce what anyone else is able to earn. It's a false tension. Tax revenue is not a simple function of the just the tax rate. It is a function of the tax rate as well as the sum total of all earnings. It is not necessarily true that increasing tax rates by X percent will yield an X percent increase in revenue from those who pay that rate.
You also seem to be overlooking the ability of private individuals to help others out of their own surplus. Is 400 million dollars spent by the government in assistance programs more or less valuable than 400 million dollars donated by an individual to help other individuals, or is it about even?
I do believe that there should be a zero-bracket for taxation, by the way. I just happen to be of the opinion that the top marginal rate should be kept low, and by low I am thinking less than 30%, maybe less than 20%. The value should be based on psychology. What rate is low enough that the people paying it won't spend much effort on sheltering their income?
Apple should locked executives for at least 10 years, 50% for 5 years and remain 50% for next 5 years, unless Tim Cook wants all of them to be changed at 5 years time!!!
We should know what is given to Ive (considering he has no real boss), a million shares like Tim Cook?
We should know what is given to Ive (considering he has no real boss), a million shares like Tim Cook?
No, it's not simply capitalism.
The products are sold to consumers for a high price - whatever the traffic will bear. Paying a high salary to people who deserve it for their value to the company is fine. But to give millions in one year to those who are doing their jobs well means that the profits are exceeding the normal expected profit on goods sold. Overpriced is correct, absolutely.
If Apple has that much EXTRA money, then lower the prices, and sell more product at the same time.
Because we live in a society. If we were all rich and successful like these guys who'd be around to do the grunt work?
I think most middle class Americans that don't want to tax the rich, or want a flat tax, like the single father with two kids in this thread that makes approx $36K per year, actually realistically think they will become rich. They think that they (the middle or poorer class) will eventually be in the position of being taxed more than those making less than them. It's a pipe dream, most people will never break out of their economic class. Unfortunately, it's a pipe dream that seems to fuel a lot of the opposition to more progressive tax policy - paradoxically - even if that tax policy will help them for the rest of their middle class lives.
Even if you object to higher taxes for higher earners on principle, another point that seems to get missed with all this discussion is the fact that wealthy people don't make their fortunes in isolation. The wealth accumulated by the rich would not be possible without the society we live in and the associated infrastructure we have created. If we take the example of Apple:
-The planes that hold shipments of iPhones need air traffic controllers, FAA regulations for safety and security, airports strips and crews
-The trucks that hold shipments of iPhones need gas stations, roads, bridges, tunnels, traffic lights, and an educated workforce for those areas
-The stores that hold stock need police protection, insurance companies, water, electricity, workforce, etc.
-The CUSTOMERS that Apple relies on for their profits require disposable income, education, electricity, etc
In essence, Apple cannot simply take from society without giving back their fair share. That fair share is certainly going to be higher than the fair share of the average single person. How anyone could think a flat tax is fair really needs to have their head examined. Apple uses far far more of society's resources to make their profits than any one person - and so accordingly pays a higher percentage per dollar made. Just because they do so on a massive scale, and thus pay a vast sum in absolute terms, should not in any way reduce their tax responsibility.
Lastly, putting some kind of flat tax on income would actually decrease the profits for big business. A flat tax means a greater percentage lost for middle and low earners (Apple's major customer base), and thus less money available for discretionary spending, and thus less money for Apple. Higher taxes for higher earners is really the only viable model as they use more of our shared resources to gain their profits.
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I am pretty sure Avie Tevanian and Jon Rubinstein got 1 million shares each during part of a 4+ million mega grant to top executives. Steve Jobs also asked the board to swap out his underwater stock options on ~20 million shares (exercise price was higher than the stock value) with options on 7.1 million shares. Don't think for a second that Bertrand Sertlet left apple without hundreds of thousands of shares of stock either (actually, I looked at his last SEC filing, which was a stock sell, listed his as owning a little over 100,000 shares, but his total sales over all of his filings added up to 96 million dollars).
If you look through SEC filings for Avie (as an Apple executive there was an SEC filing every time he exercised options or sold stock while an apple executive) you will see he sold millions of shares of Apple stock for 100s of million dollars. The SEC records stop after he resigned, since he was no longer an executive and wasn't required to file with the SEC when he sold Apple stock, but he has definitely sold more than 1 million shares of stock. Most or all of this stock was not grants, but were options at a specific price, so they weren't "free".
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I suppose that HP's Leo Apotheker must have accomplished an awesome job for severely hurting HP. That $13 million dollars he "earned" for leaving HP was well deserved. Oh wait, it's ok since the people that hired him agreed upon it. I have a few shares in HP, funny I didn't get the memo on that.
Very true. I think this is a fascinating mass delusion to observe. It really is a testament to the power of propaganda. I mean, how else could the insanely rich convince the middle class to advocate public policy that is NOT in the best interest of the middle class? To see people who have no hope of ever attaining wealth fight so fervently to protect hundred million dollar payouts for corporate execs is truly mind-boggling. Of course, the elite have a huge incentive to ensure this type of obedience, so they are very good at it.
I just love people who spout their opinion as if it is fact. Talk to 10 economists. You'll get 12 different opinions.
But of course, yours is the right one.
Jobs was an average guy that got rich...
The rich didn't get richer. These guys are by and large a bunch of engineers who went to school, took a huge risk in going to work for a risky company, worked their butts off to grow that company into one of the most valuable companies in the USA--a company that is changing the way everyone interacts with technology--and will be rewarded if they stay on board and don't jump ship to get rich elsewhere. As a labor lawyer for employees, I can't stand management getting rich at the expense of their employees. But this isn't like the CEO getting a hundred million to leave the company after driving the stock price into the ground. This is the most successful company in modern times. Good job guys. (Now, promote some women)
The rich didn't get richer. These guys are by and large a bunch of engineers who went to school, took a huge risk in going to work for a risky company, worked their butts off to grow that company into one of the most valuable companies in the USA--a company that is changing the way everyone interacts with technology--and will be rewarded if they stay on board and don't jump ship to get rich elsewhere. As a labor lawyer for employees, I can't stand management getting rich at the expense of their employees. But this isn't like the CEO getting a hundred million to leave the company after driving the stock price into the ground. This is the most successful company in modern times. Good job guys. (Now, promote some women)
I think he was referring to the attitude the middle class has against taxing the wealthy. I think it's a general statement, not specifically referring to Apple engineers.
I think part of the problem lies within the fact that a scant few people who manage to circumvent the system and succeed are somehow following some basic formula that guarantees this wealth and success. The assumption is that they all worked hard and persevered. The fact is, there are millions Americans who are working more than two jobs and working 60 hours a week just to make ends meet. I think expressive compensation based on worth ethic is just a guise for maintaining the power base that wealth is associated with.
Umm Rush the band not Rush Limb... never mind you're too young to get the reference. You also missed the bootstraps thing. Actually, you aren't qualified at all to call OWS stupid. Check back in 15 years, thanks.
Are you implying that only those who somehow "cheat" can succeed and achieve wealth? I would probably exceed the forum limit on the size of a post listing the names of those entrepreneurs in one industry or another who have succeeded and achieved staggering wealth. And that's without including those within sports, entertainment or the arts.
Just to take one example... are you familiar with the backgrounds of the guys who founded Home Depot? Do you have any idea how much of their lives (time and assets) they invested without any guarantee of ever making a cent in return?
The people who say that this is too much money for one person, or too much money for Apple, or Apple should do something else with this money, etc.... seem to believe that Apple exists in a bubble without any competition
There is an amount of money that an Apple executive is worth. And that number is not based on any absolute amount of money that you personally feel is too much.
That number is how much will another company pay to get Phil Schiller, or Tim Cook, or Scott Forstall to come to their company and work for them.
So, let's consider the possibility that Apple doesn't pay them these bonuses...
How long before Google comes to Scott Forstall and says.... look, Apple's not paying you what you are worth. We'll pay you $1 million to join Google's Android project. Without the retention bonuses, Forstall and others could easily jump ship, and for good reason.
Instead of $1 million, that number became $60 million over the next 5 years for a company to poach any of Apple's senior management. What? That number seem crazy high and prohibitively expensive??? That's the point.
arn
There is an amount of money that an Apple executive is worth. And that number is not based on any absolute amount of money that you personally feel is too much.
That number is how much will another company pay to get Phil Schiller, or Tim Cook, or Scott Forstall to come to their company and work for them.
So, let's consider the possibility that Apple doesn't pay them these bonuses...
How long before Google comes to Scott Forstall and says.... look, Apple's not paying you what you are worth. We'll pay you $1 million to join Google's Android project. Without the retention bonuses, Forstall and others could easily jump ship, and for good reason.
Instead of $1 million, that number became $60 million over the next 5 years for a company to poach any of Apple's senior management. What? That number seem crazy high and prohibitively expensive??? That's the point.
arn
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Hey, I do an exceptional job at what I do! Where is my $50 mil?
I feel a sense of loyalty to my company, and even more so to my co-workers. If I did not, I would have have jumped ship long ago (and be no doubt better off financially). If these execs feel the same about making Apple a success, they would take a 10th of what they are being awarded and give the balance to the people in the trenches, the engineers who design the products that Apple sells, the people who sell these products, and those who provide support to Apple's customers. To put things in perspective, the 400 million dollars that these 7 Apple execs are getting is equivalent to giving every Apple employee a check for $10000 (give or take a thou). Most of this money would be funneled into the world economy almost right away, whereas these few lucky men cannot possibly spend it all in the short term (sure, it will eventually be spent, by their heirs, many years form now).
Obviously these key guys are worth a lot to Apple. This proves exactly how much. It looks like they think the company would collapse without them as they are basically laying out $400 million to keep them for the next five years.
If I offered you $10 million to leave your job, and join my company, would you?
Or would your loyalty to your company outweigh the $10 million signing bonus I'm offering?
arn
scant few as in the proportion of the US population. First of all, circumvent does not equate to "cheat." Also, you are taking my words out of context. I merely stated that not anyone can just work till their fingers bleed can somehow achieve massive wealth. Granted, I am generalizing here, but to argue a long list of achievers imply that anyone with enough hard work can gain massive wealth says nothing.