Execs under CEO Tim Cook receive uniform stock grants, part of Apple's 'internal equity' compensation philosophy Apple recently awarded eight executives stock grants that were worth almost $13 million each at Thursday’s closing price, with as much as another $14 million up for grabs. The stock grants came in two parts. The first was an award of 122,863 shares that vest over a three-year stretch, starting in April 2017 and will be given if an executive is still with the company. The second, totalling 68,576 shares, will vest in October 2017, with the exact number based on Apple’s performance relative to the S&P 500 index. Most of Apple’s top management team was handed the stock awards on Oct. 17. They included Angela Ahrendts, the former Burberry CEO who heads retail and online sales; Eddy Cue, the online and services chief; Craig Federighi, the lead for software engineering; CFO Luca Maestri; Daniel Riccio, vice president of hardware engineering; marketing lead Philip Schiller; Apple’s top lawyer, Bruce Sewell; and COO Jeffrey Williams. What was interesting about the stock awards was that each executive received the exact same amount. But that was expected. Last year, Apple touted what it called “internal equity” in pay for the executives just below CEO Tim Cook on the company’s organization chart. “Because the Company’s executive officers operate as a team, the Compensation Committee considers internal pay equity to be an important factor in the Compensation Committee’s decisions,” the firm’s 2013 proxy statement read. Although that referred to salaries and bonuses, Apple has evidently extended the philosophy to stock awards. The larger of the two awards was worth approximately $12.9 million at Friday’s opening price, and was effectively a retention grant to keep the executives at Apple through April 1, 2019. The smaller grant ia more tentative: The $7.2 million of each grant represents the “target” award, which will vest Oct. 1, 2017. But the awards are tied to Apple’s performance. Apple uses a metric called “total shareholder return,” or TSR — a combination of share price appreciation and dividends paid to shareholders — to compare itself to other companies. If Apple’s TSR ranks highly in the S&P 500’s standings, the executives may be given as much as 200% of the target, or up to 137,152 shares. At today’s opening price, the maximum would carry a paper value of $14.4 million. On the downside, if Apple fares poorly, they may receive none of the target award. In 2013, for example, Cook forfeited more than 7,100 shares — pre-split shares, equal to nearly 50,000 shares today — because Apple’s TSR had been in the cellar. If Cook had received those shares, he would have another $5.2 million in his pocket or portfolio. Apple will use a three-year TSR measurement that started last month and continues through Sept. 30, 2017, to calculate the exact number of shares each of the eight executives will receive. As noted, Cook also has some of his equity compensation tied to the TSR: In August, he was awarded the maximum — 560,000 shares — because for the year prior Apple’s TSR had ranked 44th out of 480 firms included in the S&P 500. Apple’s stock price has climbed 6% since the Sept. 9 introduction of the iPhone 6 and iPhone 6 Plus, and is up 32% for the year. Related content news Dropbox adds end-to-end encryption for team folders Dropbox this week unveiled a range of features, including security updates and key management, and the ability to co-edit Microsoft 365 documents from within the file-sharing app. By Matthew Finnegan Apr 26, 2024 3 mins Cloud Storage Collaboration Software Productivity Software feature Android versions: A living history from 1.0 to 15 Explore Android's ongoing evolution with this visual timeline of versions, starting B.C. (Before Cupcake) and going all the way to 2024's Android 15 (beta) release. By JR Raphael Apr 26, 2024 23 mins Small and Medium Business Smartphones Android news analysis The unspoken obnoxiousness of Google's Gemini improvements Google's Gemini chatbot is seeing all sorts of upgrades on Android this week, but those advancements reveal a darker underlying reality. By JR Raphael Apr 26, 2024 12 mins Google Assistant Google Android news analysis Google can’t seem to quit cookies, delays killing them again Google cited regulatory challenges in its oft-delayed plans to phase out third-party cookies from its Chromium products. It now plans to eliminate cookies in 2025 By Lucas Mearian Apr 25, 2024 5 mins Chrome Browser Security Chrome OS Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe