“Long-time Apple board member Millard ‘Mickey’ Drexler is stepping down from his position at the tech giant,” Tom Huddleston, Jr. reports for Fortune. Apple said Thursday that Drexler, the CEO of clothing retailer J. Crew, has said he will not seek re-election when his current terms ends at the company’s annual meeting in March. No replacement to the eight-member board has yet been named. Drexler had served on the board since 1999.”
“Meanwhile, Thursday’s regulatory filing also showed that Apple new retail head, Angela Ahrendts, was paid roughly $73.4 million in cash and stock last year,” Huddleston, Jr. reports. “The former Burberry CEO received about $70 million worth of Apple stock as part of a compensation package meant to lure her to Apple from Burberry last year.”
“In the filing, Apple said it took into account Ahrendts’ compensation as head of the U.K. fashion house when determining what to pay her,” Huddleston, Jr. reports. “‘At the time, Ms. Ahrendts was among the highest paid executives in the U.K. and held unvested Burberry equity awards with a value of approximately $37 million,’ Apple said. ‘She also received cash and perquisites from Burberry that exceeded $5 million annually, which was significantly higher than the cash opportunities provided to the Company’s executive officers.'”
Read more in the full article here.
MacDailyNews Take: That’ll buy you a few pizzas.
[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]
Related article:
Apple CEO Cook more than doubled his paycheck to $9.22 million in 2014 – January 22, 2015
Wow, that was REALLY worth it. What an amazing change she has made in the Apple retail experience…..uh…..
I laughed at your comment but to be fair it probably takes longer than 8-9 months before any major changes can be planned, designed, approved and executed.
Well, John Browett managed to make enough (stupid) changes in nine months to get himself fired.
And forget ye not how swiftly and successfully John Browett managed to demoralize Apple Store staff. It was brutal.
I was over at my local Apple Store two nights ago and they could not have been nicer and more helpful. Great bunch.
I was at the Lincoln Park store after work a week before Christmas looking at the MBAs and couldn’t get anyone to wait on me, even though it wasn’t crowded like the Michigan Avenue store. Not that I needed anyone to wait on me since I probably knew more than the staff but I ended up just leaving and going online to research more and make my purchase. If I’d been a switcher I’d have been really disappointed.
Wasn’t cutting Apple Store staff one of Browett’s prime directives? Still seems to be in effect.
Bad Store ≈ Bad Manager. Shame. This sounds like a job for Super Ahrendts!
That is NOT typical of the Apple Stores here in SoCal. Every store I’ve seen is loaded with busy but helpful employees and eager customers. Busy selling new products and helping those who need instruction or Apple Care. It warms me stockholder heart.
Apple still does it better than anyone but seeing how it’s people that make it all happen spread over so many stores there’s bound to be a few lemons in the batch until they’re found and tossed out.
Nobody goes to Apple Stores in SoCal anymore. They are always too crowded.
Crowded yes but I’ve never had any problem getting pretty prompt attention. Maybe it’s because I always know what I want and at least as smart as anyone in the Genius Bar. 🙂
“Nobody goes to Apple Stores in SoCal anymore. ”
“They are always too crowded.”
Both statements cannot be true.
High end prices with low end service. Burberry’s in action.
With a $73 million payout in one year, you would think she would have a little more sense of urgency.
Well said.
Didn’t see anybody giving that kind of “benefit of the doubt” to that guy from dixons. Talk about bias.
Actually I made many posting here suggesting that we gave Browett the benefit of the doubt. As it turned out, they might not have been my most astute postings on here, but they were done because I had seen the guy in operation personally and thought that he was quite an impressive operator. Clearly he wasn’t a good fit within Apple, but I wouldn’t be surprised to see him doing well somewhere else in the future.
When you enter a new executive position, you have a few options. One is to not make any changes for a while – feel things out for three to six months before embarking on any changes. Another is to quickly enact some modest changes to processes, culture, etc., consistent with your vision. On the aggressive end, you can quickly enact major changes. This last approach is risky. You may not fully understand the impact of these changes to the company or accurately gauge the cultural resistance to your changes within the ranks.
Browett chose poorly. He unilaterally enacted changes at the Apple Retail Stores which went against the Apple culture and simultaneously irritated Apple retail employees. It was a lose-lose proposition, and Browett deserved the consequences.
Angela has moved more cautiously, which is prudent. She may have enacted some subtle changes, but nothing that has been apparent to me when visiting my local Apple Store. At some point, however, that $73.4M had better start paying off better than just “status quo.” Apple management is getting more than a bit generous with the compensation packages. I would take $70M in Apple stock over $37M in *unvested* Burberry stock any day. That covers the reported difference in base salary for a couple of decades.
Apple’s foot traffic is insane. Now imagine it increased by 30% and each of those people want to try on 3 iWatch faces with 5 different bands. Make that work.
Make that work worldwide and Apple would be crazy not to give you $70 mil in stock up front. And she will make it work.
Perhaps at least a portion of that $70M (for example, half of it) should have been restricted/deferred based on actually making it work.
Apple could have covered the $37M in unvested Burberry stock with a similar quantity of AAPL, but offered the rest tied to retail performance metrics of some type.
Put another way, the additional $33M in Apple stock ($70M minus the $37M of unvested Burberry stock that Angela lost in the transfer) provided to Angela as an incentive to work at Apple would cover around 1100 full-time Apple retail employees for one year.
When I worked jobs in high school and college, I thought of the little bit of money that I made in terms of “stuff” – gas, music, pizzas, etc. An hour of my labor might be worth one pizza, for instance. As I got older and embarked on a career, I gradually transitioned to thinking of money in terms of time, because free time because a more limiting factor than being able to buy stuff and I had already accumulated a lot of stuff. So, now I think of assets (money/stuff) in terms of my time.
If you assume a wage of $30K, you can hire a midrange employee for a couple of decades (including some benefits, taxes, etc.) for $1M. So tens of millions of dollars represents control over the lifetime labor of dozens of people. Hundreds of millions of dollars represents control over the lifetime labor of hundreds or even thousands of people. When you consider the situation in that light, many people in upper management are paid way too much. If you own stock in these companies, then your assets are being used to pay these people.
Angela, a fashion junkie who knows nothing about technology. Time will tell very soon whether she’s good or an overhyped waste.
The way everything has been since Jobs passed away is hype. “Wait! Just wait! Tim Cook will make it happen.” It’s cool Apple’s selling tons of iPhones… But OS X and iOS are buggy as hell, there’s no Apple TV, and we still have 20th century screen resolutions on MB Airs where the iPod Touch hasn’t been upgraded in far too long.
I’m not seeing anything other than riding the coattails of Jobs. We need some change Apple.
Time for you to find a new song to sing, or just find another website to troll.
At the senior executive level, in order to hire away from another corporation you usually need to buy them out of the stock options they have already occurred with their current company. So in this case, she probably has something upwards of $60 to $70Million in Burberry options if she had stayed there and the vested, assuming current strike price. Is it outrageous for shareholders? Perhaps. Is it common place and practice? Absolutely.
Commonality is not a defensible position. What moral or logistical justification was there for Apple shareholders to pay not just what Burberry’s promised her, but also a signing bonus, plus stock options,plus hundreds of perks that aren’t even disclosed on SEC filings in addition to her already overly generous base salary? Can anyone point to ONE significant decision she has made that improves the Apple customer user experience? As a user and investor, it is sickening to see tens of millions of dollars shoved at people because they look pretty, they check the “diversity” box, and they keep a conference room chair warm instead of throwing them around.
The executive pay insanity knows no end. Jobs was a class act who we all know created Apple to “Think Different”. He clearly earned his keep and was paid AFTER performance was shown. Now Apple acts just like any other corporation, with executives lining their pockets while users continue to suffer from an unprecedented number of glitches and bugs and user unfriendly design in the past 4 years. No single person at Apple or anywhere else earned $74 million last year. They took it away from more productive investments that could have been made.
I’ve been at Apple since ’97 (my hire-on stock options were recast to more shares at a lower cost within a couple of months when Apple lost $250m in a quarter).
I am absolutely delighted with what Tim Cook and The Board have done in choreographing the current exec team. I knew we needed more women at the top, and Ms Ahrendts has brought a refreshing touch along with her retail prowess. I love shopping in the Los Gatos Apple Store. 🙂
Longer term is always open to fresh experience, of course. “What have you done for me lately?” is a question that needs to be asked of all companies, and especially those in retail and storefront support lines. It pains me to read of poor experiences, but “the feel” I get is that we’re listening and aimed upwards.
Were anyone to ask me as an Apple insider how I feel about the company’s prospects, I’d say, “Better than ever.”
Hope that wasn’t too sappy or Pollyanna-ish.
No, no, it’s nice to hear something cheerful for a change. There are Cassandras aplenty on the Internet, bringing us down.
I think her stamp on the Apple Retail experience will be revealed at the Apple Watch launch. 😍
Agreed. Her real impact has yet to be felt, because the Apple Watch is the thing that requires Apple to radically change its approach to retail. So we’ll see what her take on Apple’s retail is (and whether she’s worth the investment) very soon.
Me, I’m expecting big things.
Quite so. I would also ask ‘when’, ‘ever’…did Apple signal major changes, by publicly tinkering with an established successful venture just to satisfy folks short of patience? They don’t. That’s what got Browett the push…public tinkering, not cleared from the top.
I would also argue that Angela Ahrendts is well worth the $73.4m just keeping the Apple Stores Juggernaut on the rails with no major changes; never mind the fact that her unique fashion industry ‘insider’ status is worth $73.4m per day in Apple Watch sales alone.
Wait… MDN has a couple of posts down a story about Tim Cook doubling salary last year to 9.22 million and he hires Angela for the retail chief position and she made 73.4 million last year???
Am I missing something?!? (besides getting a gig as retail chief)
Yeah. You missed reading the article.
Lighten up Sheldon! Apparently sweetie, lack of knowing sarcasm isn’t your only forte. You now can include “tongue in cheek’ to that list. Okay Moon Pie.
very simple.
salary is small at the top of the food chain – compared to stock options. Stock options are paid amongst other things for great things expected from the new guy as well as compensation for money lost on other opportunities.
Mr Cook received 1 million stock options in 2011 worth 384 million dollars; he can cash the first half after 5 years, i.e. august 2016 and the other half in 2021, if he stays on board for that long (which I guess he`ll do).
http://money.cnn.com/2011/08/26/technology/tim_cook_stock_bonus/index.htm
Keep in mind, that after the stock split, these 7 million options are now worth around 800 million dollars.
If Apple continues to thrive, Mr Cook will probably rake in 500 million in 2016 and another billion in 2021.
Sounds like a lot, is a lot, more than I can imagine, but compared to the stock price boost, still a bargain.
Yes you are missing something; most of that amount is in deferred stocks.
Yeah, but it’s a great headline that got a load of clicks.
Well she is overseeing Appe Retails largest expansion to date China, Apple are opening like 30 stores in 2 years there and 5 in 5 weeks from today.
In the USA you have a population of 300 million and over 200 Apple Retail stores. China has a poplation of about 1.4 billion and 400 million of these are wealthy enough to buy Aplle products and growing Apple has about 10 stores there now!!!!
If each one of those China stores employees are about 100-300 per store thats about 5000 to 9000 new emplyees to train and 30 stores openings to oversee and run. Apple currently makes $10 turnover in the Chineese market, what do you think the new stores will increas this too $20 billion or more?
Well if Apple are awash with cash, maybe they could pay tax on profits in the individual EU countries their retail outlets are located; rather than funnelling them through a dodgy avoidance deal with Eire.
The tax deals are not dodgy, they are perfectly legal and used by many more companies in addition to Apple. If politicians wish to get there hands on more of the money, they are free to simply change the rules.
I didn’t say they were illegal. They are however under EU review.
Unfortunately to get the rules changed requires 27 countries to agree and because the minnows use this ploy to rake im millions (whilst allowing companies to avoid billions) they are in no hurry to change.
It is about ethical trading. Some counties in EU are near broke and equitable taxes being paid in countries where the products are sold might just go so way to level the playing field.
“Tax the rich feed the poor till there are no rich no more Stop the War” Alvin Lee
The rich who want to STAY rich invest their money to create jobs which lift people out of poverty, and hopefully have those same people able to earn enough to start investing themselves. This is the basis of capitalism.
On the other hand, poor people don’t invest because they essentially live hand-to-mouth. So they don’t create jobs, they don’t help lift others out of poverty, and they don’t make any headway themselves. This is the basis of socialism.
So sure, tax the rich until there are rich no more.
Idiot.
How many more people will Ahrendts hire if she has $73.4 million in her pocket instead of, say, $37 million?
I know that the popular right wing meme is that only rich can create jobs, but that’s just not accurate at all. When such obscene money is poured into the bank accounts of the few, they can’t possibly spend it wisely or meaningfully. The ratios just don’t work. Ahrendts is NOT worth 1000 Apple retail employees. No human being could possibly be. Apple would achieve much better results if it expanded its retail operations more and enriched its executives less.
As for Apple now becoming a fashion shoppe — let’s hope it doesn’t come with the extra dose of snobbery that many other luxury brands wear on their overpriced sleeves.
Apparently you didn’t get the reference A space in time
I’d love to change the world Alvin Lee R.I.P
Suspect she would have made as much or more by continuing as CEO of Burberrys. If Johnny Ive says she is wicked smart that’s good enough for me. Expect her influence to show up when luxury items hit the Apple Store.
I think the Apple store experience has changed a bit.
The person at the door seems much more in control, like a traffic cop and will attempt to find you a sales dude or steer you to the right area to wait.
When I went to buy an iPhone6 there was a newish procedure where we queued up outside the store while someone took my order. After a short wait sales guy comes out of the apple store and helps with the details and purchase.
Maybe that’s not all new but they seem to be handling people better. Previous experience was more like, I’d wander into the store and stand around helplessly hoping to catch someones attention.
One thing is certain – Apple’s website is harder to use than before. The white and gray stripes on the top and bottom of the screen are poorly laid out — they are just not adequate, and are wholly inconsistent. On the US site, the top bar says “Support” near the upper right ,,, and then just below it in tiny print is another bar that has a pulldown menu labeled “Get Help”, and then if one scrolls all the way to the bottom there is a huge list of miniscule illegible print that has direct links to where a person might really want to go. That’s just one example of shitty formatting and orientation. It’s confusing, it’s illegible, it’s ugly, and it’s annoying that Apple can’t do better on its own website. What’s worse, the search function is too clunky and basic. You have to make multiple clicks and wait for panels to appear before you can filter or get complete lists of search results. Talk about needless complication.
On the bulk of its online store homepage, Apple seems to be pushing more 3rd party accessories than displaying and explaining its own hardware. The new customer would not have a clue where to find displays, Airport, etc. There is not a good page showing all the cables and adapters that Apple offers. Official support pages, tutorials, and downloads are harder to find, leaving the user to spend way to much time on other sites and forums in order to get simple questions answered.
Apple used to be about simplicity, intuitiveness, user-centric experience. Now Apple seems to be all about hiding user controls and useful information behind its stores and subscription-based services. I don’t see show adding more fashion improves the fundamental problems that many people have — getting help troubleshooting increasingly problematic Apple software.