New Retail SVP Angela Ahrendts Receives Signing Bonus Worth $68 Million

[gss7881]

We need 68 Million worth of improvement in Genius Bar

Based on my last experience at the Genius Bar where my MBA was not working properly ... it was HORRIBLE!!! I hope she fixes the technical support at the apple stores because from my experience it is not what it used to be.

 

[koban4max]

she gets this signing bonus for what? having blonde hair, white, and female with weird look?

 

[xmichaelp]

angelaadrendtsrumors.com

 

[groovyd]

looks like she has a glass eye or something... strange gaze

 

[xmichaelp]

At least she does something. There countless celebrities and reality stars who make as much doing nothing other than working out and getting plastic surgery.

And don't get me started on baseball athletes, and coaches...

If you could play baseball as well as MLB players you would earn their salaries too. It's one of the most hard to get jobs in the world and their salaries reflect that. I mean, people value entertainment, so naturally people dump their money into it. Would you rather more money go to owners just so the players can make less? Someone has to make that money, why not it be the people who actually provide the entertainment?

Sorry I just don't get the complaints about athletes salary. It always comes back to "well teachers only make X0,000 dollars and it's not fair!!". When in reality almost anyone can become a teacher, and the job market reflects that. What people "should" earn for X job is irrelevant. It's never going to be that way.

 

[xmichaelp]

Ah, the wonders of gender-based affirmative action...

Oh I forgot males don't make that much.

Oh I forgot women can't do anything good unless they're given special priviledges.

 

[yeah]

Yet another example of the stupidity of the planet. NO ONE is worth that!
From clothing to tech even.. what were they thinking!

I don't see why you all are complaining, Apple has billions in the bank. It's their money, not yours.

Oh and these are stocks, not a one-time payment of $68 million.

 

[class77]

Please read the article properly . She doesn't get 68 Million to sign the contract.

1. It is paid in installments to reward the success of her strategy. No success = no shares.
2. Before she received the contract, she will have to have designed a framework strategy already and a clear business case. Not delivering = getting fired= no shares. Remember Browett?

You clearly have no idea how these things work. If you do, then please explain how it is impossible that Ahrendts will not be able to add value in excess of 68 million dollars.

How many millions did the last guy get who was FIRED in less than a year's time? What was the added value he brought to Apple that was worth it? Again, IT'S MY OPINION, that no single person can bring that kind of value into a company unless you develop the brand from the ground up.

 

[bretm]

Agree, that is just plain stupid. I promise you, promise you, I wouldn't think I was worth that amount if I had the attainments she has.

But she is worth that. That's what economics is all about. Supply and demand. You think they think they're losing 68 mil by hiring her? Absolutely not. Why would they do that? That 68 mil is a drop in the bucket. They expect her policies to create or make that kind of money many times over.

If they thought they could hire Joe Graduate and get the same productivity they would. But they could pay him 25million in bonuses instead and he'd probably run the department into the ground and lose millions a day or month. So, that's not exactly saving them money.

It's all about scale. She'll be in a position that can swing profits exponentially one way or the other. They're gambling on a win. And it's about risk too. If she screws up, she might not find work again.

----------

How many millions did the last guy get who was FIRED in less than a year's time? What was the added value he brought to Apple that was worth it? Again, IT'S MY OPINION, that no single person can bring that kind of value into a company unless you develop the brand from the ground up.

Like I've mentioned, she could easily make a change in policy on day one that swings profits that much in a month or a year. So how is that not worth it?

It's all about scale. Hell, if Apple were losing $100mil a year, and she instated policy that brought them to the point of only losing $20mil a year, wouldn't that be worth it? Basic math. People would complain that she's getting a huge salary or bonus when the department/Apple is losing money. But obviously, she'd be worth it.

 

[bretm]

If you could play baseball as well as MLB players you would earn their salaries too. It's one of the most hard to get jobs in the world and their salaries reflect that. I mean, people value entertainment, so naturally people dump their money into it. Would you rather more money go to owners just so the players can make less? Someone has to make that money, why not it be the people who actually provide the entertainment?

Sorry I just don't get the complaints about athletes salary. It always comes back to "well teachers only make X0,000 dollars and it's not fair!!". When in reality almost anyone can become a teacher, and the job market reflects that. What people "should" earn for X job is irrelevant. It's never going to be that way.

But they're teaching our future! People always pull the child card. True, teachers are very important, and some are really good at their jobs compared to others, but economically, it doesn't make them worth millions of dollars. Of course people value teaching children, but if the price were much higher, be it via taxes or private schools, then they would do it themselves because their own salaries couldn't support it. And, they'd be economically better off home schooling.

Look at it this way. On any given day a teacher has a pool of say 30 parents paying her salary. She's teaching 30 kids. Her salary has to come out of the pockets of those kids parents. It also to a smaller extent has to cover all the overhead too.

But look at at the economy of scale with a baseball player, coach or an actor. A baseball game might include 40-50 players and coaches, but is viewed in person by 40,000 people, and millions on TV. All of which also buy food and products. The pool of money is huge by comparison. And not because people are spending more on baseball than education. Not by a long shot. But there's 1 teacher for every 30 kids, and 1 baseball player for every million fans. Every fan just gives a tiny bit of their expendable income and there ya go.

If teachers could teach effectively in stadiums, they'd make more money.

 

[b52hbuff]

If teachers could teach effectively in stadiums, they'd make more money.

Funny you should mention this...
http://www.businessweek.com/stories/2006-12-10/where-a-teacher-can-make-millions

The stage of Seoul's biggest indoor arena is flanked by two giant video screens to ensure that even folks in the nosebleed seats won't miss a thing. As the performers take the stage, the crowd of 10,000 breaks into thunderous applause. But the stars of the Nov. 25 show aren't a pop band or a rap group. They're instructors from Megastudy, the biggest of Koreas 28,000 "cram schools" that help students get ahead in everything from physics to French. "With his signature, I feel his energy," 18-year-old Yang Hae Jin beams after scoring an autograph from one of the celebrity teachers.

 

[shiftless]

I don't see why you all are complaining, Apple has billions in the bank. It's their money, not yours.

Oh and these are stocks, not a one-time payment of $68 million.

Fully understand stock options and how they work.

This is, at best, a $200k and 20% bonus annual salary position.

But, not the worst in the industry. FB produces nothing and is worth $BB.

 

[peterdevries]

How many millions did the last guy get who was FIRED in less than a year's time? What was the added value he brought to Apple that was worth it?

Too many millions and he brought nothing. Mistakes are made and I personally despise that amounts such as these are paid when basically no services are rendered or when someone doesn't achieve their target. In my company you get no bonus and no salary increase for no performance regardless of the rank.

Again, IT'S MY OPINION, that no single person can bring that kind of value into a company unless you develop the brand from the ground up.

Sure, but aren't opinions based on reasoning? Not attacking here, I'm trying to understand why a person who should bring billions to Apple should not be worth 68 million. In another post above I explained the mechanics of how these numbers are assembled. What part do you challenge and is there an alternative?

 

[IJ Reilly]

Fully understand stock options and how they work.

This is, at best, a $200k and 20% bonus annual salary position.

But, not the worst in the industry. FB produces nothing and is worth $BB.

These are not options, they are RSUs. They are shares that vest over a period time, and even pay full dividends in the meantime. They should be represented at full value, whether they are a one time grant or a grant spread out over time. Not that Apple pays any of it out in cash, except the dividends.

 

[thekev]

Ah, the wonders of gender-based affirmative action...

Do you have any evidence to support that beyond coincidence?

 

[IJ Reilly]

Yep, judging from the way the comments in this thread evolve, people don't even read what was said before. They just log in, blurt out some uneducated nonsense, and leave to do the same in other unrelated threads without coming back and partaking in the discussion.

This forum is sadly turning into an anger management class for spoiled and jealous children..

Consider the number of juvenile posts commenting on her appearance. I wonder what century some people are living in.

 

[peterdevries]

Consider the number of juvenile posts commenting on her appearance. I wonder what century some people are living in.

We can be pretty sure that most of them were born in this century, which would explain a lot.

 

[unplugme71]

Brilliant! You, sir, deserve a raise.

All the students can park their cars inside in the 2 levels for aircraft storage. There's a decent size cafeteria. I'm sure some gymnasium can be made there as well.

Then set sail for the school session and play battleship with your other friends who also have naval vessels. Students will definitely want to be alert and pay attention so they don't get sunk.

 

[Bare]

The interesting thing about this level of compensation is that I think it actually backfires in aligning interest...

There are many reasons to be motivated to do a great job at Apple. But since absolute stunning wealth has now been guaranteed by this contract, I don't suspect an increase in share value and therefore slightly higher amounts of wealth is going to be very high up on the rank of motivations. At least not for most people. You need a literal addiction to money (and this has been recently discussed as something that one develops in financial sectors) in order for money to remain a major motivator once you have tens of millions of dollars.

Interesting.

Would most people be happy half-assing a job, getting $60+ million for it, getting fired (and probably getting a huge severance package) and living it up for the rest of their lives? Probably. At the same time, most people would also want to move up in their careers, make an impact, do a good job and be rewarded for performing well.

The actual amount of money may seem irrelevant in that, in terms of buying power, it's all about the same whether you're making $10 million a year or $20 million a year. Where it still matters, though, is valuing yourself professionally, and determining how your employer values you. There is something -- I think not nearly as much as executives and corporations would argue, but something -- to be said for the retention aspect of these high compensation packages. If every company lowered their executive comp packages by 50%, the world would probably be better for it and the executives' lives wouldn't change that much. However, you have to pay for top talent or some other company will.

As others have mentioned, a lot of the grandeur of this grant is due to her being recruited away from the top position at another successful retail company. If you want to lure someone away, you have to give them a reason, and you also have to make the person whole on what they're walking away from by leaving their previous employer.

I think when you get to that level, it's all about remaining relevant, and remaining in the "club." You want to perform well to get your compensation so that you can tell all the other execs you hang out with that you did it. You have self respect and dignity, and a drive and passion for your work that won't be satisfied by taking your millions and moving to an island.

 

[WinstonRumfoord]

Apple are paying so much simply in order to publicly demonstrate that they *can* pay so much.

hahahahahahahahahahahahaha

 

[iMacFarlane]

Assuming you average $200K p/a income over your 40yr working life (lucky you) her sign-on bonus is more than you'd make in 8 of your lifetimes. Jus saying'.

Also, with that income, Apple writing a $65 million check would be equivalent to you shelling out $13 for the neighborhood kid to mow your lawn.

 

[Mugambo]

Okay, it took a really long time to finish reading the thread.

Some really REALLY good insights of how people view money and strong jaws.

Airline carriers have resorted to reducing the number of peanuts they provide in order to call profit, so lets not go there at all.

Clearly, many do not comprehend corporate economics.
The board members who signed that much to her did so with an expected favor to be returned when their appraisals are around. That is common.

Apple makes iPhone for some $180? (now don't quote me on that number +/- $40) and knows how to mark it up and market it. Kudos to them.
Along these lines, someone also quoted a human is worth some $160 with all the chemical composition we're made up of.
Please don't be fooled by what Apple is paying anyone.
If they can consistently create humongous revenue generating ecosystems like 'digital music (iTunes), app store, iBooks, mac app store now the supposedly rumored health app ecosystem' just stop for a second and think, 'don't you think they know how to extract value from employees and make them accountable for it?'.

On a side-note $60 whatever millions is only an insurance policy against employee poaching & corporate America has got it right.

Whoever has the problem with anyone getting paid so much, why didn't you attend that job interview then?

 

[TallManNY]

Interesting.

Would most people be happy half-assing a job, getting $60+ million for it, getting fired (and probably getting a huge severance package) and living it up for the rest of their lives? Probably. At the same time, most people would also want to move up in their careers, make an impact, do a good job and be rewarded for performing well.

The actual amount of money may seem irrelevant in that, in terms of buying power, it's all about the same whether you're making $10 million a year or $20 million a year. Where it still matters, though, is valuing yourself professionally, and determining how your employer values you. There is something -- I think not nearly as much as executives and corporations would argue, but something -- to be said for the retention aspect of these high compensation packages. If every company lowered their executive comp packages by 50%, the world would probably be better for it and the executives' lives wouldn't change that much. However, you have to pay for top talent or some other company will.

As others have mentioned, a lot of the grandeur of this grant is due to her being recruited away from the top position at another successful retail company. If you want to lure someone away, you have to give them a reason, and you also have to make the person whole on what they're walking away from by leaving their previous employer.

I think when you get to that level, it's all about remaining relevant, and remaining in the "club." You want to perform well to get your compensation so that you can tell all the other execs you hang out with that you did it. You have self respect and dignity, and a drive and passion for your work that won't be satisfied by taking your millions and moving to an island.

Yep, totally agree. I think the biggest motivator for a C-level executives at a place like Apple is going to be the very public nature of their success and failures. People will talk about you, articles (like what we are responding to) will be written, your friends and family will read about you, and folks will know if you did a good job or a bad job. That is very motivating. But the extra money? Hmmm. Angela is now, based on this level of compensation, set for life. If she doesn't show up for work, of course, she will get fired. But performing well enough not to get fired is a fairly low bar. So, in some ways, Apple can't use cash as a motivating factor anymore for Angela. She just won't ever really need it. She certainly won't work as hard as someone who needs to perform in order to pay tuition for their kid to go to school or to keep up with the mortgage payments. In essence, I think these huge stock payments really don't align the executive and shareholder's economic interests. They cost a lot and they actually insulate the executive from the worst repercussions of business failure.

----------

Consider the number of juvenile posts commenting on her appearance. I wonder what century some people are living in.

Happens to all female executives. Or frankly to almost any picture of a woman posted on the internet. That said, some of those pictures have been excessively photoshopped. Does she really need to make herself look 29? Sad, but maybe while working in fashion she felt the need to do that.

 

[IJ Reilly]

We can be pretty sure that most of them were born in this century, which would explain a lot.

You are more charitable than I am, it seems. I find that lots of people think and behave like 12-year-olds long into chronological adulthood.

----------

Happens to all female executives. Or frankly to almost any picture of a woman posted on the internet. That said, some of those pictures have been excessively photoshopped. Does she really need to make herself look 29? Sad, but maybe while working in fashion she felt the need to do that.

I can't comment of the Photoshop point, but I don't think this attitude is exclusive to women. I have seen plenty of childish remarks about the appearance of nearly everyone who has their pictures published here.

 

[charlituna]

There is no chance that the number of shares don't increase with the stock split. Just none.

So you have access to her confidential contracts. Good to know.

Perhaps this access to insider information includes all the details about exactly why Forstall was fired, what the next iPhone will look like etc. Give us some scoops.