May 25, 2012
What Would Jobs Do? Cook Forgoes $75 Million In Apple Dividends
Lee Rannals for RedOrbit.com
Steve Jobs left some big shoes to fill when leaving his post at Apple last year. His predecessor, Tim Cook, may not have the same inventor's vision Jobs had, but he has been successful at keeping Apple's continued success rolling by being a good leader.
This week, Apple decided to hand out dividend equivalent payments to employees at the company who hold restricted stock units (RSUs). However, not all of the qualifying employees opted to be a part of the program.
Cook passed on his dividend equivalents, turning down more than $75 million in payments over the life of the restricted stock units.
When Cook was promoted to CEO last year, he received 1 million RSUs, half of which vest in five years, while the other half in ten.
"At Mr. Cook's request, none of his restricted stock units will participate in dividend equivalents," Apple said in an U.S. Securities and Exchange Commission (SEC) filing on Thursday. "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."
In March, Apple agreed it would pay a cash dividend of $2.65 per share to its shareholders. The company extended its dividend plans on Thursday when it told the SEC that its committee had approved amendments to each of its employees holding RSUs.
"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," Apple said in the filing.
Forgoing the $75 million is a move the late co-founder Steve Jobs would have been proud of. Jobs ignored the idea of paying dividends to share holders, but Cook decided to break that trend back in March.
Jobs was also known to give up money at Apple as well. Since he became CEO at the company once again in 1997, his salary at the world's most valuable company was $1, so Cook's actions are right inline with what Jobs would do.
The Apple co-founder was not broke by any means though, because not only was he receiving $1.4 billion worth of Apple stock, but he also was receiving about $4.4 billion worth of Disney stock.
Cook has been sitting in the driver's seat of the world's most valuable company since August 24, 2011, when Jobs gave up the reigns to him. Steve later passed away on October 5 after battling pancreatic cancer since 2003.
Jobs was not only unwilling to pay dividends to its shareholders, but also liked to collect a stockpile of cash. The company is sitting on about $100 billion in cash that investors and analysts are anxious to see Apple pour back into some other companies.
Other members of Apple's executive team are eligible for the dividends, including software executive Scott Forstall, and market chief Phil Schiller. None of the other executives were included in the SEC filing as those who chose to opt out of the dividend.