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.'"
Re:not like it's real money (Score:5, Interesting)
I feel ya, bro, I feel ya.
She was of the same school as Scully. "We sell a brand, not products." We need to find the business schools where they learn this shit and burn them to the ground.
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BMO
Re:not like it's real money (Score:4, Interesting)
I'm not going to speculate on the exact reasons for Jobs resigning as CEO but I suspect it was done now rather than later is so that Tim Cook gets a chance to prove to the rest of the world that he really is capable of running Apple. So should Jobs step down completely/die/whatever in the future the stock price won't tank because everyone has gotten over the whole "Apple needs Jobs to survive" thing.
In that way it's a smart move. If anything, Jobs is 56 years old, even if it wasn't for his illness that sounds like the age at which you'd at least be considering your retirement plan. For all we know he might be perfectly (well as perfect as you can be after a transplant and cancer) healthy but just knows that he doesn't want Apple to go down the drain when he retires and he doesn't want to keep working past 60 or 65.
I know a few people who ran their own companies and they all started putting things into motion for their retirement in similar ways when they were in their mid-50s, it just takes a while to step down when you're The Boss(tm).
Re:This is the right way! (Score:4, Interesting)
I hate to say it - but, yes, you're naive. You must have missed the government bailout of my nation's largest banking corporations. Despite the fact that our largest banks were on the brink of bankruptcy and disaster, those same banks took bailouts in one hand, and paid their executives exorbitant bonuses with the other hand. There have been numerous news stories in the past decade, of executives being sacked, or even convicted, but still demanding (and getting) lucrative bonuses and/or severance packages. I have no idea how the rest of the world handles these things, but here in America, if you are one of the "Good Old Boys", you can't lose. Drive a good company into the dirt, and walk away with awesome bonuses.
Incentives are hard (Score:5, Interesting)
I might be naive on this, but isn't this how bonuses already work? I thought that bonuses were tied to performance or meeting other goals...
Not necessarily. Sometime bonuses are given out for no immediately obvious reason. Sometimes they are given out because the company board's compensation committee are a bunch of buddies who give the CEO a bonus even when the company loses money. Even if there are performance goals attached, all too often they are too easy reach. Goal oriented bonuses are difficult. Make them too easy and you don't accomplish anything. Make them too hard and they serve no incentive purpose - no point in reaching for a goal you can't actually achieve. In fact incentives in general are difficult to align with the goals of the company. For example, many salesmen are on commission based on revenue. The problem is that this motivates them to sell as much as possible, regardless of profitability. Companies have been ruined by misaligned incentives and management pay is no exception. There is an old saying that if you tell me someone's incentives I'll tell you their behavior.
I'd like to see an example of someone getting a bonus when they've been doing a shitty job (excluding the easy google result of the banks after the bailout).
How about Carly Fiorina who was given $180 million for what can generously be termed uninspired performance and a declining stock price. How about AIG awarding $165 billion in bonuses [wikipedia.org] AFTER receiving bailout money. It's not remotely difficult to find examples of executives being handsomely rewarded for mediocre or even terrible performance.