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Apple CEO Tim Cook turns down Restricted Stock Unit dividend worth over $75 million

Posted: , by Alan F.

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Apple CEO Tim Cook turns down Restricted Stock Unit dividend worth over $75 million
Remember when Apple was deciding what to do with their Scrooge McDuckian bundle of cash? You might remember that they decided to pay a quarterly dividend of $2.65 per share. That, of course, will benefit all of those public stockholders whom own the shares (along with those multi-billion dollar Hedge Funds sitting on the stock). Thanks to a decision from Apple's board, the company decided that it would pay the same $2.65 dividend to holders of its Restricted Stock Units. This decision appears to have been done quietly and with good reason. Most owners of the Restricted Stock Units are employees whose holdings vest over a period of time in order to give the them an incentive to stay with the company.

Apple's 8-K disclosed Cook's decision to refuse the dividend

Apple's 8-K disclosed Cook's decision to refuse the dividend

While there is nothing illegal with Apple's actions, some might find it another way that the rich get richer, considering that these RSU's are usually found in the hands of highly-paid employees. That is why we have to give kudos to Apple CEO Tim Cook who has decided to forgo receiving the $2.65 a share on his 1.15 million RSU's over the vesting period. Cook received 1 million of these highly valuable units back in 2011 when he was named CEO. At the time, the value of that bonus was $383 million. Half of the units vest in five years with the remaining half vesting in ten years.

No one suggests that we need to throw a bake sale for Mr. Cook. After all, earlier this month the executive sold 37,500 Restricted Stock Units that he received two years ago when named interim CEO, and received $11.1 million in the transaction. Still, the amount of money that he is turning down is a whopping $75 million. While we don't know the exact reason for his decision, perhaps he too feels that Apple's decision to award the common stock dividend to holder's of the Restricted Stock Units is merely making the fat cats fatter.
"On May 24, 2012, the Compensation Committee (the "Committee") of the Board of Directors of Apple Inc. (the "Company") approved amendments to each outstanding and unvested restricted stock unit award granted by the Company to its employees (other than Timothy D. Cook, the Company's Chief Executive Officer). The amendments provide that if the Company pays an ordinary cash dividend on its common stock, each award will be credited with an amount equal to the per-share cash dividend paid by the Company, multiplied by the total number of restricted stock units subject to the award that are outstanding immediately prior to the record date for such dividend. The amounts that are credited to each award are referred to as "dividend equivalents." Any dividend equivalents credited to an award will be subject to the same vesting, payment and other terms and conditions as the unvested restricted stock units to which the dividend equivalents relate. Depending on the domicile of the employee, accumulated dividend equivalents will either be paid in cash or used to offset employee taxes due upon vesting of the restricted stock units.

The Committee determined these amendments were appropriate in light of the Company's announcement on March 19, 2012 that it intends to commence paying ordinary cash dividends of $2.65 per share to its shareholders on a quarterly basis sometime during the fourth quarter of its 2012 fiscal year. As restricted stock units are not outstanding shares of common stock and thus would not otherwise be entitled to participate in such dividends, the crediting of dividend equivalents is intended to preserve the equity-based incentives intended by the Company when the awards were granted and to treat the award holders consistently with shareholders.

At Mr. Cook's request, none of his restricted stock units will participate in dividend equivalents. Assuming a quarterly dividend of $2.65 per share over the vesting periods of his 1.125 million outstanding restricted stock units, Mr. Cook will forego approximately $75 million in dividend equivalent value."-from Apple's 8-K filing
source: SEC via AppleInsider

17 Comments
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posted on 25 May 2012, 01:50 3

1. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Let's see the fandroids twist this one around

posted on 25 May 2012, 05:18 6

4. Bashok (Posts: 36; Member since: 14 Dec 2010)


It's about Apple's CEO...not Apple iPhone.

posted on 25 May 2012, 06:27 4

6. tedkord (Posts: 4829; Member since: 17 Jun 2009)


There's no need to twist anything. We already knew Mr. Cook was a much less selfish, better human being than his predecessor. Personally, I like the guy.

The only twisting going on here comes from your type. For instance, claiming the review of the One X said it was laggy. Or always using pictures where the Samsung phone is smooshed down to the size an aspect ratio of an iPhone, and opened to its app drawer, then yelling, "See. They're the same!"

The funniest example lately was the pretzel logic Gallito tried to apply to the Apple stylus - Samsung can be accused of copying Apple even though Apple didn't come up with anything they're accused of copying. But Apple can't be accused of copying the Samsung stylus because Samsung didn't come up with the original stylus, which is nothing like the one for the Note.

Seriously, you two should just sit back one day and read all your own past posts. It's good for a laugh, at least, and may be illuminating.

posted on 25 May 2012, 08:40

12. TR0LL (banned) (Posts: 41; Member since: 20 May 2012)


Tim could ev bought a company milliards ov
Apple Tv, and conquered 90‰ ov the world
Population, that doesn't own a Apple product......
Instead he takes his self centred-measures to boost
Apples stock price and augment his own $580.000.000 pay package.....
Fire Tim!
Fire the board!
Start over again....

posted on 26 May 2012, 14:16

15. DigitalBoy05 (Posts: 202; Member since: 04 Jun 2011)


Youre just trying to stir the hornets nest. I applaud Cook for his decision.

posted on 25 May 2012, 02:50 2

2. darktranquillity (Posts: 284; Member since: 28 Feb 2012)


Ha ha, apple thought they can fool their CEO like they fool their iphans with overpriced junks:-P.

posted on 25 May 2012, 08:08 1

11. TR0LL (banned) (Posts: 41; Member since: 20 May 2012)


So true. Cheap shattering glass, once dropped it breaks!
Then they charge £45 just to replace it... What a rip off!

posted on 25 May 2012, 02:58

3. DownHer (Posts: 8; Member since: 21 May 2012)


Internal Revenue Service?

posted on 25 May 2012, 06:16

5. grif_ (Posts: 61; Member since: 28 Apr 2012)


thats a loot of money:0

posted on 25 May 2012, 06:36 1

7. dejahu (Posts: 35; Member since: 01 Feb 2012)


Looks pretty terrible if the CEO of a company is turning down this kind of offer within the company.

posted on 25 May 2012, 06:58 1

8. remixfa (Posts: 13913; Member since: 19 Dec 2008)


We all know Steve McGreedy Jobs would never have turned it down.. he also never would have payed dividends to outside sources anyways.
I wonder why he turned it down? Is a lil blurb of positive press worth 75 million?

I definitely have "more" positive feelings about Cook that I do of Jobs, but he is still continuing the culture of slave workers, even if he is doing a few nice gestures for his american works.

posted on 25 May 2012, 07:39 2

9. JeffdaBeat (unregistered)


I don't even think the man has been in the position for a year yet. You can change things that dramatically in less time than that. Even Jobs' massive turnaround didn't happen in less than a year. Although I doubt Apple will bring their manufacturing back to the states...I am still hoping we see something...even in the Apple Stores...where people can make a better living from working there.

posted on 25 May 2012, 09:11 1

13. remixfa (Posts: 13913; Member since: 19 Dec 2008)


i was thinking specifically of how Sharp is getting in on the display game with apple.. and how sharp partnered with foxconn to get it done. Thats more apple production workers tied to foxconn that could have been prevented. That was a decision that Cook could have played a part in if he wished. Maybe I'm hoping for a bit much, but if Cook really cared, he would be finding ways to get away from foxconn's practices, not adding more workers to the fold.

posted on 25 May 2012, 11:52 1

14. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Samsung does business with Foxconn how do you feel about that hypocrite?

posted on 26 May 2012, 18:24

16. remixfa (Posts: 13913; Member since: 19 Dec 2008)


does samsung make all of their products with foxconn? can you tell me which ones they do? The big name stuff and new tech is all in house.
I love samsung's high end tech, but i know better than to buy their low end stuff. Thats the stuff made by foxconn.

im not a hippocrit, your just a troll without a clue.. or a life.

posted on 26 May 2012, 21:36

17. InspectorGadget80 (Posts: 6515; Member since: 26 Mar 2011)


So does Apple you dumb a$$. How do u feel when the Foxconn workers suicide themself making those ipads/iphones. You probably dont care bout them

posted on 25 May 2012, 07:48

10. tluv00 (Posts: 134; Member since: 18 Oct 2007)


He turned it down because he really has not earned it IMO. They are still riding the momentum from Jobs and right now Cook needs to really carve out his own book of products under his watch.

Even the iPhone 5 is seen as Jobs last product so until that is launched there really isn't anything that Cook can say he "owns".

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