updated 07:30 pm EDT, Fri August 26, 2011
At current prices, would be worth $383M
Apple's required filing of form 8-K with the SEC, a formal notice to the regulatory body as well as shareholders of major changes within the company, reveals that the board of directors has offered new CEO Tim Cook a strong incentive to stay for the long haul -- an offer of one million shares of "restricted" stock that, if valued by today's stock price, would be worth $383 million, AppleInsider reports. Cook will receive half of the units on his fifth anniversary as CEO, and the other half on his tenth.
Cook already draws a high salary at Apple; in 2010 as COO he received $58 million in salary, bonus and other stock awards. His work in the COO capacity not only effectively ran the company during the most recent and previous medical leaves former CEO Steve Jobs took, but was also highly regarded throughout the business world for his canny ability to manage inventory, production supplies and contractors. Cook's procurement and supervision of the manufacturing of Apple products was and remains a key factor in the company's high profitability.
The form actually serves as legal notification of the changing of the guard at Apple, not a report on compensation. It serves as formal notice that Jobs had resigned, that Cook had been promoted to fill the CEO position, that Jobs had been appointed Chairman of the Board and that Cook had been appointed to the board of directors.
The awarding of restricted stock units (RSUs) is thus far the only mention of any form of compensation for Cook in his new role, and is contingent on his staying employed at Apple for at least five years. The first half would be awarded on August 24th, 2016 -- the exact five-year anniversary of his promotion, with the remainder being awarded on August 24th, 2021. Based on current stock prices, the total award could be worth up to $383 million, but the actual value will be dependent on what the stock is worth at the time it is actually vested.
Jobs, who was already a billionaire before his return to Apple in late 1996, famously took only $1 in annual compensation, though he was periodically awarded similar RSU bonuses and a Gulfstream V private jet for his work with the company.
In addition to providing a strong incentive to stay with Apple, the board's offer also expresses confidence that Cook can continue to lead the technology giant in a way that maintains the company's high value and profitability. Though not known for his own creative vision, if Cook can retain the current management team -- including iOS chief Scott Forstall, Industrial Design leader Jonathan Ive and marketing head Phil Schiller -- he can focus on his own strengths in core CEO responsibilities to the company and manage a team rich with creative and engineering vision that will provide strong continuity going forward.
In addition, Jobs will remain as Chairman (and, undoubtedly, a general overseer and strategizer for the company) as long as he is able. [via AppleInsider]