Apple Puts $383 Million Handcuffs On CEO Tim Cook 170
theodp writes "There are bonuses. And then there are bonuses. Apple's board, led by sadly frail-looking chairman Steve Jobs, signaled its long-term confidence in Tim Cook as the company's new leader, disclosing in a regulatory filing that it's awarding the new CEO one million restricted stock units that will vest over the next decade. Apple shares closed at $383.53 Friday. From the SEC filing: 'In connection with Mr. Cook's appointment as Chief Executive Officer, the Board awarded Mr. Cook 1,000,000 restricted stock units. Fifty percent of the restricted stock units are scheduled to vest on each of August 24, 2016 and August 24, 2021, subject to Mr. Cook's continued employment with Apple through each such date.'"
This is the right way! (Score:4, Insightful)
This way if the company continues to win and prosper, he will become wealthy. Otherwise no honey. This is the right way!
Oh look... (Score:5, Insightful)
Motivation to look out for the long-term interest of the company instead of the next quarter.
Whoda thunk it?
Sadly, such motivation is missing from the portfolios of many CEOs.
These are not handcuffs. The only people who think these are handcuffs are day traders and speculators. Fuck them.
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BMO
Re:Oh look... (Score:2, Insightful)
Day traders and speculators in the employ of major banks and trading houses unfortunately make the market.
I think you mean make up the market. Corporations producing goods of value make the market.
Re:not like it's real money (Score:5, Insightful)
it's stock he can't sell for another 10 years. it's only worth 383 million if the stock price stays where it's at. Just look at GE after jack welch left. MS after bill gates. or almost any other company after an iconic CEO or founder steps down. the stock usually tanks.
usually it's the law of large numbers. you can't grow as fast when you're a huge company
Amazingly, even though "the market" is EXTREMELY jittery right now, Apple's stock only went down by 7%, and in two days is now trading HIGHER than the pre-announcement price.
This reflects the fact that Tim Cook IS the right man for the Job, and in fact, already HAS a proven track record at Apple, since he has run the company twice (or is it three times?) during Jobs' other hiatuses (hiatii?). And Apple and Jobs' have been quite smart by pushing Tim's previous fill-ins out into the limelight. Not only did that signal to everyone that Apple had "a plan" for succession, but also let everyone get to know Tim Cook, and his managerial style.
Fortunately, Jobs' protracted illness has given both he and Apple time to do this right. If Jobs had died in a plane crash or something, and no one had ever heard of Tim, THEN there would have been a bigger drop. But not this way.
Apple's stock isn't going to be "tanking" anytime soon. Now go spread your FUD somewhere else.
Re:not like it's real money (Score:5, Insightful)
What it probably reflects is that the news of Jobs departure was already factored into the stock price. Investors already knew how central Jobs has been to Apple, investors knew that Jobs had previously taken a medical leave for pancreatic cancer, and investors knew that Jobs had gotten a liver transplant which appeared to be an effort to treat a recurrence of that cancer. This wasn't insider information or anything, this was widely reported in places like Slate.com. Given that, it seemed like the question was not whether Jobs would leave but when, and everyone's been waiting for this to happen. Now it has, and the uncertainty is removed.
Re:Can he sell covered puts... (Score:4, Insightful)
Recall that US-style puts can be excercised any time before they expire. He also can't cover a "European" put option, because there's no guarantee he'll keep working for Apple and own the stock 5 years from now.
Re:This is the right way! (Score:5, Insightful)
It's a message to the outside world more than anything else: Apple and Cook saying "We think this job is long term and we're going to make profit doing it together." Sort of a mutual vote of confidence to calm any anxiety outsiders might have.
Re:not like it's real money (Score:5, Insightful)
>Because Apple isn't selling a brand? An image?
No, they don't They sell products first. The brand, the reputation /follows/.
It's how they were brought back from the dead, because Apple had a shitty reputation back in the 90s because they did stupid shit like sell an '030 machine for $10,000 with a straight face (the 20'th anniversary edition Macintosh).
Scully was "brand first, product last" and it showed through the entire 90s until Jobs came back after learning hard lessons at NeXT.
"Brand first product last" kills companies. It was introduced at HP with Carly, and the effects of the Carly era are still being felt, because HP just decided they can't compete in the hardware arena anymore.
Another "brand first, product last" company is Nokia. Nokia built a reputation on innovative phones that worked. Now look at them. Instead of innovating in the smartphone space, they sat on their hands and phoned it in (hah) on their name, only to become a Microsoft puppet in the Trojan Horse CEO deal of the century.
I give HP 5 years, and then their stock is going to be pennies.
I give Nokia 2 years and they will cease to exist.
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BMO