Tim Cook could lose millions of dollars if Apple continues to underperform until August

“If Apple continues to underperform for the next eight months, CEO Tim Cook stands to lose quit a bit,” Evan Niu writes for The Motley Fool.

“In 2013, Cook voluntarily chose to modify the massive grant of restricted stock units that he received in 2011 upon becoming CEO,” Niu writes. “He received 1 million RSU shares under the 2011 award, and these were initially only time-based awards that would continue to vest as long as Cook stayed with the company. The modification effectively converted a large portion of these shares to performance-based awards where tranches would only vest if Apple met certain criteria.”

“This modification only has the potential to be negative for Cook, and there was no upside possibility to the change for his compensation. Cook & Co. felt that it was the right thing to do to enhance corporate governance, and Cook asked the board that his 2011 award and all future equity awards be subjected to performance criteria,” Niu writes. “Apple decided that the most relevant performance metric would be total shareholder return, or TSR, which includes reinvested dividends. But Apple’s TSR must outperform comparable other companies for certain measurement periods for each related tranche to vest. If Apple performs within the top third, 100% of the tranche vests. If Apple performs within the middle third, 50% of the tranche vests. If Apple performs within the bottom third, 0% of the tranche vests.”

Read more in the full article here.

MacDailyNews Take: Whatever impetus there is for a man who’d already fabulously rich, let’s hope there’s enough of it for Apple Inc. to somehow mange to make things that they should already have on the market, like an Apple 4K (or even a 5K) monitor, for just one glaring example.

SEE ALSO:
Apple’s bold compensation plan has the company and CEO Tim Cook facing a challenging year – January 7, 2016
Technical analyst: Apple may plummet another 29% – January 7, 2016
Apple stock price tumbles 3% in premarket, now trades well below $100 – January 7, 2016
Apple stock slumps near $100 amid ‘iPhone sales worries’ – January 6, 2016
Wall Street’s freak out over declining iPhone sales is overblown – January 6, 2016
Piper Jaffray: Apple’s iPhone production cut do not necessarily presage sales decline – January 6, 2016
Foxconn plans ‘rare’ holiday as iPhone output fears rattle investors – January 6, 2016
Apple to release Q116 earnings, webcast live conference call on January 26th – January 5, 2016
Apple CEO Tim Cook declines RSU dividends worth in excess of $75 million – May 24, 2012

27 Comments

  1. Tim already has more money than he can spend on himself in a lifetime. I’m pretty sure his income isn’t what motivates him. I believe he loves Apple and wants the company to continue to excel. But 2016 is certainly a time for improved execution of that strategy.

  2. For those who are critical of Tim Cook, here is a link to an article you should read. https://apple.news/AppoiUvvmPAS_f7Fo-eEDaw

    Apple, and Tim Cook performed at an incredible level in 2015 based on real fundamental financial analysis. It is entirely illogical, based on economic fundamentals, that Apple’s stock price is as low as it is. It is completely bewildering when comparing Apple with some of it’s contemporaries, such as Google, Facebook, Amazon, Microsoft, etc.

    1. Considering the lunatic manifesto of the current WallNut Street manipulators, they’re not going to be happy until THEY ruin Apple, the company. What do you want to bet?

      May they FAIL miserably and Apple dance upon their fetid graves. I’ll dance too! 😀

      1. i don’t think so.

        there is no point for them to ruin apple, but there is LOTS of money to be made by driving the valuation down then buying in and riding the rocket back up,selling out then repeating the process.

        they don’t even have to let it go back up all that much, as they operate on the scale of megabucks, so they just churn things and profit handsomely on the way up and back down.

        so no, i don’t think they are out to kill the goose who lays the golden eggs.

        kind of goofs it up for the rest of us though who have invested for the long term and retirement security

        1. You are of course correct. What stock is literally safer in the long term than AAPL right now, despite the manipulation? Of course ride it back up. But I still hold that the Biznizz Bozos hold major resentment against Apple for success based on quality, versus parasitism.

        2. But why do they have to continually go after Apple when there are plenty of other stocks around they can churn? Can’t Apple do anything about making the company less vulnerable to these conditions? CNBC appears to be waging a war against Apple. Someone must be behind the attack I would think. Apple must have made some group or groups really angry. Every time Apple does something, someone is jumping all over it as being some huge mistake. Apple can’t be the only company making mistakes. I’m sure Apple has a loyal customer base for a good reason.

          I’m not hurting from what’s happening to Apple as I bought most of my shares over ten years ago and I’m getting my dividends which I never expected. I just think Wall Street’s game is hurting Apple’s credibility as a major company being a solid investment. What new investors want to deal with this type of nonsense all the time? Wall Street is making Apple look like a junk investment and that really seems dishonest. It certainly can’t be helping our economy.

          1. “Can’t Apple do anything about making the company less vulnerable to these conditions? CNBC appears to be waging a war against Apple. Someone must be behind the attack I would think. Apple must have made some group or groups really angry.”
            I am with you 101%, Thank you for speaking my mind. Now the retaliation has begun!. CNBC is a good platform for that.

          2. Intelligent people in Cupertino got to find or think of a way to combat with AAPL downtrends and also with CNBC, the Apple’s haters. It is abnormal for CNBC bashing Apple on daily basic, definitely there are some groups of people want to ruin Apple for some reasons. Fight back Apple!.

      2. A post I did a while back:
        There are people on Wall Street that do what they do to boost their ego. They are not in it for the money or to help great companies. They are in the game to show off how much “power” they have.
        Right now there is a pissing match on who can destroy Apple quicker. Break it up into pieces and sell off everything, then brag to their cronies “See what I did!”.

        There is no reasoning with them. Go private or pray the SEC does something. HA! That will never happen.

        1. I’m betting you’re correct. Why is my species so incredibly insecure, to the point of becoming megalomaniacal in order to overcompensate for their personal sense of desperation? Or maybe we’re talking about that incoherent aberration called psychopathy, in some form or other.

          In any case, this is my species’ self-destructive imperative on display. Oops, that’s me getting maniacal.

    2. Agreed!

      Apple isn’t underperforming as a company, their stock price is underperforming when compared to their internal financial performance, which is nothing short of incredible.

      Now, if you do an analysis of Wall Street, where stock prices are set in a (you are free to laugh here) “Free Market”, there you will find some real questionable performance. Stock prices of high profile stocks such as Apple, Google, FaceBook, Amazon, etc have become completely detached from the real financial performance of the companies. It is that fundamental ability to earn real money that determines the real fundamental value of a company. Wall Street may pay lip service to that fundamental value, but we can all see, based on stock price to earnings ratios that the Market Cap has little connection to fundamental value. In reality, Apple is outperforming all these other companies in every way but in stock price, which is entirely subject to the emotional whims of some emotionally unstable traders.

      1. But exactly why has Apple become Wall Street’s “black sheep” of the tech industry. Do you think Apple is being singled out because of its money earning power or does Wall Street really think Apple has no future value worth paying for. Microsoft’s price target has already been raised to $65 a share after all its gains in 2015 and I’m sure they’ll reach that number.

        Apple’s share price did poorly all of 2015 and yet it’s still being lowered. Apple has absolutely nothing going for it in terms of share price gains. Apple is getting closer to IBM in terms of P/E and that makes no sense at all because Apple isn’t taking the sort of revenue losses IBM has taken. I believe Wall Street has to be trying to punish Tim Cook for his arrogant attitude towards Wall Street. I think Tim Cook is right but i guess being right isn’t the same as being wise.

  3. If you are given something that becomes worth $10 million, then it falls to $8 million, you didn’t lose $2 million. Now you were given something worth $8 million. Which means you gained $8 million.

  4. We????

    Most ORIGINAL Apple investors – Apple’s core, who are the core Apple supporters,
    Don’t for a moment doubt Tim Cook’s merit, prowess and ability to lead Apple into a new millenium of superlative growth and innovation.

  5. It’s probably the gays. No wait… it’s Obama. No, that’s not it. Maybe it’s the liberals. Nah. It’s gotta be that Tim Cook guy. No wait, it’s… oh, skip it.

  6. MacDailyNews, Tim Cook again dropped the ball on a new product. The iPad pro’s pencil. The Apple Pencil was not available for weeks when the iPad Pro started shipping! If it was available and Tim Cook had not dropped the ball again, I would now be asking, where is the “Pro” version in all iPad sizes. Want a new catalyst for a refresh and boost of sales in the iPad line up! Up grade the top of all iPads to a Pro version NOW!

    Tim, stop killing my investment in Apple ‘s stock!

    1. Have you all noticed that not one analysist has yet to calculate the upgrade to the iPad Pro version if it were to be offered in ALL iPad sizes. They just say that there is no up coming stimulus to jump the sales of the iPad lineup. Really? Pro the standard and mini sizes and I will by 2 now and 2 more for Christmas. Maybe a iPad Pro mini with Apple Pencil for my dad’s birthday this March. That is 5 iPads and 5 Pencils just for me this year. (Note: 5 Pencils is the same cost as an iPad at $99 each.)

      Idiots, that is just one EASY TO DO fix to the year over year growth in just one of Apple’s product line. I need to make a road trip the Calafornia to the bar to slip a things to get done list to one of Apple’s R&D people.

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