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Apple CEO Tim Cook Sells $57.8M in Apple Stock

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Apple CEO Tim Cook last Friday was awarded 560,000 shares of Apple stock as payment for his service as Apple's CEO and Apple's strong performance under his leadership.

Following the award, Cook this week sold more than 265,000 of those shares at prices ranging from $216.96 to $218.54, netting him nearly $57.8 million. The remaining 294,840 shares worth more than $63 million were withheld by Apple for taxes.

As with all transactions where Apple executives sell stock, the sale was done under a Rule 10b5-1 trading plan that was adopted on May 4, 2018.

The stock Cook received last week included 280,000 vested restricted stock units (RSUs) provided to him as part of his compensation as CEO and another 280,000 vested RSUs awarded because Apple achieved a higher shareholder return than at least two-thirds of other companies in the S&P from August 25, 2015 to August 24, 2018.
Mr. Cook's award provides that if Apple's relative TSR performance is within the top third of the companies that remain in the S&P 500 for the entire performance period, the 280,000 performance-based RSUs vest in full. If Apple's performance is in the middle third, the RSUs will be reduced by 50%, and if Apple's performance is in the bottom third, the RSUs will be reduced to zero. Apple needed to achieve a TSR of at least 56.23% to outperform the middle third of the companies in the S&P 500 for the performance period, and at least 19.94% to outperform the bottom third of the companies. Apple's TSR for the three-year period was 89.94%, which ranked 50th of the 423 companies that were included in the S&P 500 for the entire period and placed Apple in the 88th percentile. Therefore, all 280,000 of the RSUs subject to performance requirements vested.
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Cook is set to receive an additional 560,000 shares each year for the next three years if he remains Apple's CEO and Apple's shareholder return continues to be among the top-third of companies in the S&P 500. Cook will also see 700,000 RSUs vest on August 24, 2021.

After selling the stock that he received this year, Cook continues to own 878,425 shares, worth close to $193 million at today's closing price of $219.70.

In the past, Cook has said that he plans to donate the majority of his fortune to charity. Cook last week donated almost $5 million worth of Apple stock to an unnamed charity.

Article Link: Apple CEO Tim Cook Sells $57.8M in Apple Stock
 
Article Link
https://www.macrumors.com/2018/08/28/tim-cook-57-million-apple-stock/
Considering the financial health of the company it‘s nearly humble.

Let‘s talk about actor incomes then...
 
CEOs don't just sell stocks ahead of bad news, this is illegal and covered by SEC rules now that make companies set sell-off dates in advance either as a part of a vesting program or just an up front disclosure that a year from now, they plan on selling X amount of shares no matter what the price.


https://www.investopedia.com/terms/r/rule-10b5-1.asp

Edit: Via - https://appleinsider.com/articles/1...5m-in-vested-rsus-on-strong-stock-performance

One year ago exactly

Last Thursday, Apple disposed of 291,377 shares to satisfy the minimum statutory tax withholding requirements on vesting of RSUs. Cook on Friday and today sold the remaining vested RSUs in a series of transactions ranging from $159.96 to $161.43 pursuant to his trading plan. The executive netted some $43.2 million as a result of the selloff.

Cook retains 901,474 shares of common stock in his trust worth $145.6 million at the end of trading today. Another 2,940,000 RSUs are pending, including a batch of 700,000 RSUs scheduled to vest on Aug. 24, 2021. The most recent 280,000-unit award was the
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Looks like every year in August, Tim cook's RSUs awarded straight up on an annual basis OR performance based vest and he's allowed to sell them off. There are smart people that know more about finances than I but if I were a rich man, I'd do an annual sell-off as allowed by the SEC on a pre-set time / strike price just to cover my annual tax bill either by literally paying the feds OR donating a few million to charity as a write-off or moving them over into diversified assets like Tim Cook's trust.
 
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groadyho said:
Maybe he knows something the rest of us don't. 30 something yrs ago when Syntec higher ups started selling their shares, I did, good thing too, they went belly up
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Nah. Maybe he's ready to help out Musk at Tesla? Not likely. Nope it's just hedging his personal best when he can before it all gets far too expensive to hold.
 
B-Mc-C said:
Absolutely. In California, it doesn’t take very much income to put someone into the top tax brackets. For a single person, that’s 37% federal + 13.8% state + 3.8% ObamaCare Net Investment Income Tax. Highway robbery.
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+ Some cities and counties have additional income taxes/fees.

Of course, effective tax rates are a different story . . .

I do fine, but one year I did really, really well. Not anywhere close as well as Mr. Cook, but still well. And I learned *a lot* about taxes and taxing authorities I had never heard of before. I leaned all about how a good financial planner can save you a ton if you have the ability to foresee when such a windfall would occur. I assume Cook does. And good for him.

I also started learning about how nice flat tax (even a fairly progressive curving flat tax) would be. I doubt it would ever happen. Too many people have too many tax benefits, including people with "long-term" capital investments (heck of a lot of people), houses (a whole heck of a lot of people), and children (officially referred to as a f**k-ton of people) who would fight until their last breadth.
 
mtneer said:
I am no tax accountant, but wow, does that mean that he got taxed at a rate more than 50%??
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The typical sale of stocks in a person's portfolio is that the oldest is sold first. So, I'm sure he had 265,000 Apple share 366 days ago.

This means he will be taxed at 15%.

B-Mc-C said:
In California, it doesn’t take very much income to put someone into the top tax brackets.
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Don't bash California on this, the tax in this sale has nothing to do with the state the person lives in.
 
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KPandian1 said:
The typical sale of stocks in a person's portfolio is that the oldest is sold first. So, I'm sure he had 265,000 Apple share 366 days ago.

This means he will be taxed at 15%.



Don't bash California on this, the tax in this sale has nothing to do with the state the person lives in.
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The value of those shares on the day they vested is taxed as ordinary income, just as if he had been paid that much in cash on that day. So, possible deductions and such aside, he has to pay the normal federal and California tax rates on their value.

If he holds shares after they vest, gains they make after that time are taxed as capital gains. It’s the same as if he were paid cash and used that cash to buy shares.

Even if he didn’t sell shares, he’d owe ordinary income taxes on the value of shares that vest. That’s why the common practice is for Apple to withhold an amount of shares (for Mr. Cook, more than 50% of the shares he’d otherwise receive) and remit a corresponding amount to taxing authorities.
 
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mtneer said:
I am no tax accountant, but wow, does that mean that he got taxed at a rate more than 50%??
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No. Capital gains tax on stock is 20% (over $426K 15% for us mere mortals).

Income tax is what you are thinking of and it is rarely what the rich pay, but most people don't understand that and therefore support raising it to punish the rich - I mean make them pay their fair share. When that really just hits the upper middle class.
 
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Scottsoapbox said:
No. Capital gains tax on stock is 20% (over $426K 15% for us mere mortals).

Income tax is what you are thinking of and it is rarely what the rich pay, but most people don't understand that and therefore support raising it to punish the rich - I mean make them pay their fair share. When that really just hits the upper middle class.
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Uhhhh... short term capital gains (and RSUs) are taxed at ordinary income rates. Any form of capital gain is also taxed as ordinary income when it comes to California state tax. You’re also forgetting the ObamaCare NIIT. So many people who are clearly not investors in here...
 
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KPandian1 said:
The typical sale of stocks in a person's portfolio is that the oldest is sold first. So, I'm sure he had 265,000 Apple share 366 days ago.

This means he will be taxed at 15%.



Don't bash California on this, the tax in this sale has nothing to do with the state the person lives in.
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It most certainly does. Just because your state may not tax capital gains doesn’t mean they all don’t. I am a California resident and a shareholder in the same tax bracket.
 
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Carnegie said:
The value of those shares on the day they vested is taxed as ordinary income, just as if he had been paid that much in cash on that day. So, possible deductions and such aside, he has to pay the normal federal and California tax rates on their value.

If he holds shares after they vest, gains they make after that time are taxed as capital gains. It’s the same as if he were paid cash and used that cash to buy shares.
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The tax at issue is on the shares that he sold, not the ones he received as salary/bonus. Sure he paid tax on the income shares, but the sold shares will be from his existing portfolio of age, which will be at the same rate as anyone pays for capital gains when selling a share held for over a year.

1080p said:
Dude just paid more in taxes than he put in his pockets....
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No, he paid tax only on the sold shares at the lowest capital gains rate, like the you and me. His income shares are taxed at the regular rate for his income bracket, but they stagger it to minimize the tax burden.

B-Mc-C said:
It most certainly does. Just because your state may not tax capital gains doesn’t mean they all don’t. I am a California resident and a shareholder in the same tax bracket.
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The state and federal taxes are balanced/offset by deductions of those taxes paid.
 
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I'm sure he earned every penny. Has nothing to do with riding on the coat tails and accomplishments of a past CEO.
 
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