“It was learned through Apple’s 8-K filing with the SEC on Thursday that CEO Tim Cook specifically declined to be included in a dividend award program being offered to those employees who hold restricted stock units (RSUs),” AppleInsider reports.
“In the filing, it was reported that Apple’s board of directors had decided to apply RSU holders with the same $2.65 per share quarterly dividends offered to public shareholders, but Cook requested not to take the award that would be worth more than $75 million,” AppleInsider reports. “Because restricted stocks vest in intervals, an executive or employee is more apt to stay with a company and perform well to ensure the highest payout when the units convert to shares. After being named CEO in 2011, Cook received a one million RSU bonus which at the time was worth an estimated $383 million. The chief executive’s RSUs are on a five and ten year vesting schedule, meaning that half of his restricted units vest in five years with the remainder to be converted after ten years.”
Read more in the full article here.
MacDailyNews Note: As we reported in our live notes from Apple’s March 19, 2012 ‘cash balance’ Conference Call: “At Tim Cook’s request, none of his unvested Apple Inc. RSUs will participate in the dividend.”
That’s a classy move no? He’s not acting like a pirate raiding the treasure.
Finally. A CEO who realizes when he has enough money, and doesn’t want more just because he can have it.
Yeah,
After taxes he could have had around 25 million spending money for the weekend.
Yeah. Now that he won’t be paying tax on that income, I expect the New York Times and Chuck Schumer will be ranting about this as a tax avoidance scheme!
I am not a tax person, and Tim Cooke is not a fool. I suspect this has a lot to do with tax consequences and perhaps if he forgoes this he gets a compensating number of shares with better tax implications short or long term. Not sure, but…
Apple’s a public company, and they have to disclose what they pay their senior management. If you want to know, you can look it up in the SEC forms they file every quarter.
-jcr
It has nothing to do with taxes and everything to do with having your pay based on the performance of the company (i.e. the stock).
No, it’s not because of immediate tax consequences. The tax on a dividend payment cannot exceed the payment itself. So even if he had to pay something crazy like 90% in taxes for the $75 million, he would still get $7.5 million.
I’m sure the real reason is to eliminate any (real or perceived) conflict of interest, on the decision for Apple to start paying a dividend. Because Tim Cook recently became CEO, if one of his first key decisions (that differed from his predecessor’s) was to offer a stock dividend, how would it look if that decision was worth a $75 million “cash bonus” to Tim Cook. Some people would suspect that he did it for self-enrichment, and not for the good of the company and its shareholders.
Although he should be entitled to receive the money, it’s a classy move to decline the dividend on his restricted shares. In the long run, investor confidence is Apple’s leadership (from actions like this) will hopefully more than offset what he gave up (in the short term) with a long-term positive impact on share price. And that will help ALL shareholders, not just Tim Cook.
“Don’t ask yourself, ‘What would Steve do?’, ask yourself what’s best for Apple.” – Steve Jobs
Well played Mr. Cook.. Very well played.
Cook is a classy guy but the board are just wall street scumbags. Cook should buy bak most of the stock and Apple should be Apple. It might have a a tight year or two but most of the board will leave
Mr Cook was part of the decision to pay the dividend, a massive change in direction for Apple. It would be unseemly for him to make a decision of this magnitude if the result would be for him to directly benefit by an additional $75M. Very stylish and clear headed. Also quite Jobsian.
Taxes or not. This is a honourable move by Tim.