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Apple Paying Dividends to Employees with Restricted Stock Units, CEO Tim Cook Declines to Participate

This is how CEOs should run their company's finances, leave the money in the company despite having shares of it and just taking the profits when it's available.

I think like Steve Jobs, running Apple isn't about the money for Tim Cook. This makes me admire Apple and the people there even more.
 
wovel said:
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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I suggest you do some basic fact checking before you try insulting me
http://www.verisi.com/resources/us-ceo-compensation.htm

That is just one of many links showing how out of line it is. CEO pay in general world wide is way out of line but the US is even worse.
 
Carnegie said:
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.
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I haven't been taking note, but I'd be very surprised of he owned only 14,000 shares outright, as he's been getting stock options for years now. I believe this is disclosed in the company 10-K somewhere.
 
Not sure how all that works, but dividends should be for people who bought stock at the regular price. So I feel it is correct for him to decline.
 
iMikeT said:
This is how CEOs should run their company's finances, leave the money in the company despite having shares of it and just taking the profits when it's available.

I think like Steve Jobs, running Apple isn't about the money for Tim Cook. This makes me admire Apple and the people there even more.
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Ok, remove his shares from him, his fortune, and pay his the same as an Apple store worker.
See just how loyal he is then. If you can spot him in the trail of dust that he leaves in his wake as he rockets off to another company.

Top businessmen are generally THE MOST DISLOYAL employees you could ever see. Cut them down to "worker" level pay and condition and Blam, They're off.

If the lower paid workers who stick with a company for years who are the loyal ones.
 
Rodimus Prime said:
I suggest you do some basic fact checking before you try insulting me
http://www.verisi.com/resources/us-ceo-compensation.htm

That is just one of many links showing how out of line it is. CEO pay in general world wide is way out of line but the US is even worse.
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Ugh. This study is worthless. It's like saying, "CEOs in new York get paid more than CEOs in South Dakota! They should get paid the same because they have the same title! New York CEO pay is way out of line!"

Did you know that Boeing 747 Airliner salesmen get paid more than car salesmen? That aircraft mechanics are paid more than auto mechanics?

CEOs in the US are paid more because they are paid on commission. And US companies make more money than other countries.

I absolutely detest these statistical comparison pieces that have ZERO mention of the obvious and most relevant causational reason for the disparity.
 
LaWally said:
Did you mean Jamie Dimon, CEO of JPMorgan? If so, I don't see how he's relevant to this story.
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A mere play on words and a contrast between:

Mr. Cook - "At Mr. Cook's request, none of his restricted stock units will participate in dividend equivalents".

Mr. Dimon - "He received a $23 million pay package for fiscal year 2011, more than any other bank CEO in the United States".

My point is one CEO gives up $75 million and one CEO can't explain a more than $2 billion loss.

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Badandy said:
This better be a typo.
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Of course it was. My only point was Mr. Cook gives up $75 million while Mr. Dimon can't explain a more than $2 billion loss.
 
afin said:
Notable. Now lets see the "99%" folks try to spin that badly.
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I don't know if I am part of that 99% or if I am the 1% elite, though I still find it annoying that he alone was awarded a little shy of 400,000,000.00 $ and turns down 75,000,000.00 $ for the mass.

It should be the other way around.

The responsibilities of business entities has shifted from the view expressed by Milton Friedman - “There is one and only one social responsibility of business: to use its resources and engage in activities designed to increase its profits”. To maximize profits for the shareholders has become impossible to sustain today.

There is an increased sensitivity and awareness concerning environmental and ethical issues - such as the pay gap between ceos and workers - that cannot be ignored.

I am not saying it's not a good or classy gesture, but it's still just a gesture.
 
IJ Reilly said:
I haven't been taking note, but I'd be very surprised of he owned only 14,000 shares outright, as he's been getting stock options for years now. I believe this is disclosed in the company 10-K somewhere.
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It gets reported on Form 4 (Changes in Beneficial Ownership) and Form 14A (Proxy Statement).

Mr. Cook's newly vesting stock is typically sold immediately (i.e. the RSUs are settled in stock as soon as they vest and that stock is then sold), as is that of some other Apple executives (e.g. Messrs. Oppenheimer and Schiller).

In light of a rule adopted some years ago by the SEC regarding what constitutes insider trading, many executives now establish plans which specify ahead of time when, or under what circumstances, they will sell stock. That's to protect themselves from insider trading accusations. Those plans often dictate that stock is sold as soon as it vests (sometimes only enough to cover the tax implications of the vesting is sold). When we hear that a particular insider sold a large chunk of stock, often it doesn't reflect a decision recently made by that person. It's something that happened (effectively) automatically in accordance with a plan they had set up and the timing of the sale was dictated by when the RSUs happened to vest.

So, yes, Mr. Cook has received (and exercised) a number of RSU awards in recent years. But the resulting stock has, for the most part, been sold. In March he sold nearly 240,000 shares which had just vested, leaving him with the approximately 14,000 shares that he previously owned.
 
user418 said:
My point is one CEO gives up $75 million and one CEO can't explain a more than $2 billion loss.
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A better comparison would have been Aubrey McClendon of Chesapeake, who seemingly used his CEO position for personal advantage at the expense of shareholders.

And before you give Tim Cook too much credit, the paying of dividends on RSUs would never have been enacted without Cook's ultimate approval. For Mr. Cook to benefit personally to the tune of $75M from the decision would have been unseemly, so I don't give him too much credit on this.

I know it is fashionable to bash bankers these days, but if I've got a bank to run, Jamie Dimon is the man I want running it.
 
The Monkey said:
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?
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Yes there is a tax benefit. You make less money, you pay fewer taxes (not necessarily a lower rate but possibly). If I make $15,000,000 and turn down the opportunity to make $15,000,000 more in a year, that is taxes on $15,000,000 that I don't have to pay (in CA it would work out to around $7,500,000 between Federal and State taxes, assuming it is taxed as an ordinary dividend rather than a qualified one). But I'd still have $7,500,000 less than I would have had if I took the money.

But this is all moot. Cook didn't do it for tax benefits or other 'accounting' reasons like that.
 
Taeser said:
Ugh. This study is worthless. It's like saying, "CEOs in new York get paid more than CEOs in South Dakota! They should get paid the same because they have the same title! New York CEO pay is way out of line!"

Did you know that Boeing 747 Airliner salesmen get paid more than car salesmen? That aircraft mechanics are paid more than auto mechanics?

CEOs in the US are paid more because they are paid on commission. And US companies make more money than other countries.

I absolutely detest these statistical comparison pieces that have ZERO mention of the obvious and most relevant causational reason for the disparity.
Click to expand...

supply and demand. It takes a very special breed of person to be a very successful CEO/upper level exec. Therefore, competition for them is tough, and compensation follows. Is it fair? Well, what is fair?
 
LaWally said:
For Mr. Cook to benefit personally to the tune of $75M from the decision would have been unseemly, so I don't give him too much credit on this.
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Because something is 'unseemly' doesn't stop most CEOs from doing it. I give Tim Cook credit.

LaWally said:
I know it is fashionable to bash bankers these days, but if I've got a bank to run, Jamie Dimon is the man I want running it.
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We can see who you're a fanboy of.
 
afin said:
Notable. Now lets see the "99%" folks try to spin that badly.
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How about something like:

"Once again Apple via Tim Cook is depriving both California and the U.S. of tax revenue by declining to take his $75m dividend. His decision will deprive CA up to $7.8m in near-term additional tax revenue and the U.S, 11.25m. Think of the kids Mr. Cook. Think of the kids. Your wily, bold effort at income evasion, allowing Apple to keep its money is shameful."
 
Gasu E. said:
Are you implying Tim Cook's decision is typical of the rest of the 1%?
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I'm pretty sure he's just referencing the nonsensical nature of the occupy movement.

There was an thread about Apple dodging taxes a week or so ago. People were referring to Apple on one side as evil and Bill Gates on the other side as a great philanthropist. Tim Cook is an individual in Apple who made a good decision and took a $75 million hair cut. No, he's not as generous as Bill Gates, and no, I don't think Cook was being philanthropic, but $75 million is definitely something.
 
Not quite the case ....

Nobody I know working for Apple is earning anywhere near "minimum wages". If you're referring to the factory workers in China, even -- they get paid well above what's typical for their line of work, in their location.

I'm not saying they couldn't make a job with Apple Retail a bit more financially rewarding than they do ... but it's also about supply and demand. People clamor for those jobs, even with the current pay and work hours. Why would any company pay higher wages when they consistently get more qualified applicants than they have openings for?

Bottom line is: Most people don't have the drive, willpower or determination to do what it takes to start their own company and grow it into a big corporation. They just want to work the minimum number of required hours at some job that gives them a regular paycheck. So you see the huge difference in pay there. Always been that way and always should be, IMO.


macchiato2009 said:
when would Apple start rewarding its employees all around the world for working their ass off ???

salespersons, geniuses and all the guys who stand from early in the morning until late every evening to sell and repair all Apple products for minimum to average wages...

the company makes billions, regular employees get peanuts

oh yeah, a few discounts per year... money that goes back to Apple's pocket
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