Looks like it works then, doesn’t it?

Tim Cook, the chief executive of Apple, has collected $89.6m as part of a 10-year deal that he signed as an incentive to keep the iPhone maker at the forefront of the technology industry after he took over the reins in 2011 from company co-founder Steve Jobs.

Mucho dinero.

The stock package awarded to Cook in 2011 was originally valued at $376m, but is now worth much more because Apple shares have increased by six-fold since he signed the deal.

Seems to have aligned his interests with those of the shareholders quite nicely, overcoming that principal/agent problem.

7 thoughts on “Looks like it works then, doesn’t it?”

  1. He still has the half the shares so betting he can do more or doesn’t want to put out the opposite message. Presumably the rest sold immediately to pay the tax bill. So his success also benefits the state massively and immediately. I bet that doesn’t get mentioned anywhere.

  2. Was he rewarded merely for share price growth, or for outperforming the rest of the market? Quite a different set of incentives really.

  3. Bloke in Costa Rica

    As of time of writing, Apple’s market cap is $834 billion, a long way ahead of Alphabet (Google as was) at $643 billion.

    I haven’t noticed many embuggerances with successive versions of iOS. I really like 10. And macOS just keeps getting better. When High Sierra comes out in a few weeks it’s going to have the best filesystem out there (like ZFS, but improved). And I can seamlessly move all my development stuff between Linux and my Mac, unlike with horrific Windows.

  4. Not necessarily aligned all that much. RSUs and other share-based awards are usually structured as free options (with a $nil strike price). Execs can therefore (basic option theory) increase the value of their awards by increasing the forward volatility of their company’s stock (whether by gearing up or taking bigger strategic risks). They don’t bear the downside, but shareholders do.

    May not be the case for AAPL specifically, but the alignment isn’t that great. Which is why most institutions push for execs not to sell the shares they have (i.e. to make them bear some downside risk).

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