Ondrej Holzman Being a top man at a company like Apple involves big numbers on the payroll. When Tim Cook assumed the role of CEO, he received a bonus of one million restricted shares that were to vest in two phases over the following years. However, that is changing now - Tim Cook is no longer sure that he will actually get all the shares. It will be about how his company will fare.
Until now, the practice was that equity awards were paid regardless of how the company performed. So as long as Tim Cook worked at Apple, he would receive his compensation in the form of shares.
However, Apple has now changed the form of stock compensation, which will depend on the company's results. If Apple doesn't do well, Tim Cook could lose millions of dollars worth of stock. He currently holds roughly $413 million in shares.
In the original agreement, Cook was to receive one million shares, which he received in 2011 when he took the head of the Californian company, twice. Half in 2016 and the other half in 2021. Depending on the growth or decline of the company, the price of the shares would also increase, which could change over the years, but it was certain that Cook would receive all the shares, whatever their value. He will now be paid annually, in smaller amounts, but to get all the shares, Apple must remain in the top third of the S&P 500 index, considered the standard measure of US stock market performance. If Apple falls out of the first third, Cook's remuneration will begin to be reduced by 50 percent.
Everything follows from documents approved by Apple's board of directors and sent to the US Securities and Exchange Commission. "Based on the accepted changes, Tim Cook will lose part of his remuneration for CEO from 2011, which until now has been time-based unless the company achieves certain set criteria," it is in the document. Originally, Cook could theoretically make money from these changes, but at his own request, he waived that his rewards would increase in the event of a positive development of the company. That means he can only lose.
The new principle of stock compensation will not only affect the CEO, but also other high-ranking Apple officials.
You knit apples and pears. Once you write shares for 1 million, once a million shares. That's a hell of a difference…
Only if 1 share had a nominal value of $1, it would fit.
If I'm reading correctly, it doesn't say anywhere that he should get $1 million worth of stock, just one million shares.
That's fine, they're going to go dill for a while and then call SJ back to the rescue… oh wait!
But they don't go to hell.
No? Go for shares, they do not reflect the real value of the company, but they indicate the mood around it, and it has already gone from zero to negative. The new iOS7 is a step back, or let's kill something that others have been unsuccessfully trying to foist on us for 6 years, so I could continue...
By the way, the article above also reflects the "mild" concerns of the shareholders and the board about the current state of affairs...
I'm scrambling for stocks, but I still stand by the original statement. They definitely don't go to hell. Their sales are growing to historical highs, the competition cannot yet offer anything except a lower price.