Apple CEO Tim Cook’s Stock Rises With Choice to Turn Down $75 Million Dividend
Apple CEO Tim Cook is proving himself as much a master of employee and investor relations as he is of operational efficiency. His decisions to create a charitable matching program for Apple employees and to grant a long-pined-for dividend to company shareholders have won him a lot of favor among both groups, while putting his own stamp on Apple. And now Cook has made another move for which he’s likely to win accolades.
Cook is forgoing $75 million in dividends to which he’s entitled.
In a Thursday SEC filing, Apple announced plans to award a $2.65-a-share quarterly dividend on restricted stock units held by its employees. It’s a nice — and unusual — perk to offer (and one certain to cement employee loyalty in a very competitive talent arena), but Cook is passing it up.
From Apple’s 8-K:
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.
That’s a lot of money to turn down. True, Cook is very well compensated — deservedly so, considering Apple’s performance — so he can obviously afford to forgo it. But, as best I can tell, he didn’t have to.
So Cook truly did just walk away from $75 million. Which is remarkable for an executive of his standing in an era when entitlement, greed and arrogance are so often part of the job description. Which is not to say that he’s not reaping some benefits here. There’s a lot of mileage for Apple in a symbolic gesture like this, and Cook profits when Apple’s overall value increases.
Say what you will, but this was a classy gesture up and down. When was the last time you saw headlines about a successful CEO of a wildly successful company walking away from millions of dollars that he could have just as easily pocketed?
Clearly, Cook is focused on more important and interesting things than having the biggest yacht in the harbor.