Tim Cook sold more than $750 million worth of Apple shares this week after receiving the final tranche of a stock award that he was granted a decade ago when he took over from Steve Jobs as the iPhone-maker's chief executive.
Apple’s stock has risen more than tenfold since Mr Cook became chief executive in 2011, a record that entitled him to the maximum possible payout under the award.
After his remaining restricted stock awards vested on August 24th, around five million shares were sold at prices ranging between $148-$150, netting $752 million, according to filings released on Thursday.
Apple’s shares hit a new all-time high of $151.12 earlier this month, as the market capitalisation of the world’s most valuable company approaches a record $2.5 trillion.
Most of the trades were part of a pre-arranged stock-sale plan, adopted last August, through a scheme commonly used by US company executives to avoid any appearance of insider trading.
Just over half of the sales, worth $397 million, were withheld by Apple to cover Mr Cook’s tax obligations when stock options vest.
Mr Cook’s original stock award was estimated to be worth $378 million in 2011 when it was first granted, at the time putting Mr Cook among the most highly remunerated executives in America.
The scheme was amended in mid-2013 to reflect Apple’s share-price performance relative to other US companies after around a third of Apple’s shareholders lodged a protest vote on executive pay at the company’s annual meeting earlier that year.
Apple said in a filing on Thursday that its total shareholder return – which assumes all dividend payouts are reinvested – for the three years to August 24th was 192 per cent, ranking Apple 13th in the S&P 500.
The top performer on that basis, among companies who remained in the S&P 500 for the entire period, was chipmaker AMD, according to Bloomberg data, whose total shareholder return over three years was close to 350 per cent.
Charity
Mr Cook, whose net worth was estimated by Bloomberg to top $1 billion for the first time last August, said in 2015 that he planned to give away the majority of his fortune before he dies. He donated just over $10 million worth of Apple stock to charity a week ago.
Last September, Mr Cook, who receives an annual salary of $3 million, was granted his first new award of restricted stock units since his 2011 promotion. The stock award, which will vest after April 2023 and is partly dependent on total shareholder returns, could be worth almost $150 million at today’s share price, if Apple hits the top end of its targets by 2025.
In January Apple said that it would add an “environmental, social and governance modifier” to its executives’ annual bonus schemes, allowing the board to vary the cash payout by 10 per cent according to an assessment of “values-driven leadership”. – Copyright The Financial Times Limited 2021
