Investors don't normally take a liking to executives cashing in stock options...
These weren't options - they were grants.
The execs would need to sell half of them just to pay the taxes on the grants! Investors should know this.
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Apple Executives Cash in Over 1 Million Shares of Apple Stock
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These weren't options - they were grants.
The execs would need to sell half of them just to pay the taxes on the grants! Investors should know this.
Dan Frakes noted yesterday that if you'd invested 10k in Apple stock in 1997, you'd have $750,000 today.
Yeah......shut up.....I think I had all my money tied up in Coleco stock
Why? It depends on the amount of shares they have totally. If I compare this to the company I work at, each board member owns millions of shares. If they would sell just a few hundred thousand, I would shrug and get on with my work. Now if they would sell a double digit percentage, than that would get me worried.
Again, the stock is up $4 and all information points in the direction that Apple growth will continue aggressively for the next few years with the iPad and other strong hardware. Only the early demise of Steve Jobs will be able to put the stock price below $200 for the next few months.. (not for me or Apple, but for the dude himself I hope that scenario is a fictitious one...)
I'm not going to bother researching the numbers, but who's to say he didn't get shares of stock worth $125 million back in 2005? Since it is now "vested" he has to pay tax on his $125 Million "earnings" - $30M is a much lower than 50% tax rate on that amount....so he withdrew enough to pay the tax, plus some carrying around money - and still has some shares left in his stock portfolio.
Dan Frakes noted yesterday that if you'd invested 10k in Apple stock in 1997, you'd have $750,000 today.
yeah...and in 1997 when Apple was hours away from closing its doors forever, who in their right mind would invest a penny in Apple?! The .com boom was beginning and Apple was # 9,823,731 on the list of top stocks to buy (I'm of course exaggerating a bit with that #). I am by no means an Apple hater but 1992-1999 was a horrific time for Apple.
Back to this topic...I'm glad these guys got their killer paychecks.
-Eric
You assume that a low level employee has the skill to traverse the markets and guide the company.
Anyone can do it...well, anyone can learn to do it anyway.
But most people aren't like that, and certainly not very entrepreneurial. Most just want a little (not too much) responsibility, a steady paycheck, and off on the weekends.
These people can't be expected to be paid Benjamins like those who are responsible for the company day in and day out.
You'd need a forklift to carry that money around...
I can see it now:
Caterpillar Salesman (CS): what can I do for you sir?
Cook: Aww, I need a forklift please..
CS: Ah, well we have some nice ones on offer today. What type of goods do you need to lift?
Cook: Oh, around $30 million in cash.. Actually do you have something that more resembles a spoon than a fork on these things?
CS: sure.. Bill Gates was here yesterday. He bought the Spoonlift 2000.
Cook: great, I'll get two. One in pink for my wife. But smaller, I give her only $5 million a week in allowance. I don;t want her to get carried away and come up spoiled..
CS: yeah, I know that problem...
I get the sense that he just doesnt feel like coming out of the closet at the moment.
He is clearly the front runner to succeed Jobs and I think he would do a great job. Most of Apple's operational successes lately are his doing. He really got Apple running like a well oiled machine and when he had to take over the company he did a great job of keeping things on track and maintaining confidence.
Bought Apple Long Ago
My first shares of Apple were purchased at a split adjusted price of $2.50. Unfortunately, I only bought 100 shares, but it is still worth over $23k which is a nice appreciation. Fortunately, I did buy some stock a few years ago at $30 per share which has appreciated nicely; makes a comfortable retirement fund.
Put off that fancy car, 3d tv, expensive vacation, and buy some stock. It's an investment in the future of America and a good down payment on retirement.
My first shares of Apple were purchased at a split adjusted price of $2.50. Unfortunately, I only bought 100 shares, but it is still worth over $23k which is a nice appreciation. Fortunately, I did buy some stock a few years ago at $30 per share which has appreciated nicely; makes a comfortable retirement fund.
Put off that fancy car, 3d tv, expensive vacation, and buy some stock. It's an investment in the future of America and a good down payment on retirement.
If their securities just vested, they may have sold them before the required holding period was satisfied. Generally speaking, they would have to hold the securities for 1 year to obtain Long Term Capital Gains treatment. There may also have been State Tax issues. I am unfamiliar with California law.
Most believe the Capital Gains tax rate will be increased in the near future. The recent health care bill also will have a 3.8% tax for "unearned income" -- which would likely include the amounts in question here.
AND... once the max-iPad release is done, the stock price may fall....
I also hope that a man as farsighted as Steve Jobs stays healthy. However, you have brought up a very good reason for them all to sell their newly vested stock. Never mind the quickly changing competitive landscape of smart phones. Android is a platform that is at least challenging if not surpassing the iphone OS at the present moment for some users. At the end of the day, Apple's supremacy is not as much of a given as it once was - hopefully they'll innovate and stay on top but you never know. This sale of stock is yet another piece of evidence that the future is not as guaranteed as it once was.
Exactly. Not to mention, most of these grants were issued as sort of a barrier to keep Cook and other key executive members from jumping ship to another company.
The quicker they dump them, the quicker the board offers them more grants to keep them at the company (which they probably already have).
It's an interesting compensation cycle as most of these guy's salaries are pretty meager considering their jobs.
Poor logic. That assumes they had access to the stocks all along or that they have no desire for the cash the stocks represent. Considering that all these people had their stocks vest on the same day, I can see anybody wanting to cash-out/reinvest as quickly as possible. They're taxed on that income the day of receipt, not when you pull it out. These guys are playing it smart by paying their taxes as quickly as possible.
There was a top marginal tax rate of over 90% on individuals making over 300k in the 1950s. Today, the richest 1% of Americans own an extremely disproportionate share of the nation's wealth.
Taxes will go up
They are probably cashing out now because taxes are sure to go up up and up. We will see more of this. I have serious normal friends that are doctors that are talking about moving money to other countries (also lots of doctor friends planning to work hard for 4 years and retire to another field).
In 1998 I invested $6000 in a local internet company that rapidly treated itself to lots of pizza. At least I was young and stupid. I could really use the $450,000 I would have if I invested in Apple.
They are probably cashing out now because taxes are sure to go up up and up. We will see more of this. I have serious normal friends that are doctors that are talking about moving money to other countries (also lots of doctor friends planning to work hard for 4 years and retire to another field).
In 1998 I invested $6000 in a local internet company that rapidly treated itself to lots of pizza. At least I was young and stupid. I could really use the $450,000 I would have if I invested in Apple.
You are entitled to yours as well. I personally don't think forced wealth redistribution is a role the government should be filling. I know plenty of people that disagree with me, so you aren't the first.
The current wars and recent bailouts are the real "forced wealth redistribution" in this country. Not a multi-millionaire paying a higher tax rate.
Exactly what I was going to say. For the past decade, the wealth has been sucked out of the middle and under classes and siphoned to the top. But it's way outside of the scope of this thread.
Am I understanding this correctly?
They cashed in hundreds of thousands of shares to take the edge off their Tax obligations - Half of which got taxed.
God bless America.
They cashed in hundreds of thousands of shares to take the edge off their Tax obligations - Half of which got taxed.
God bless America.
As someone recently told me, the government comes down to you and your vote. If we don't like it, change it. Probably good advice.