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Apple’s Angela Ahrendts in line for $68M payday

Tim Bradshaw

Apple has welcomed its long-awaited new retail chief Angela Ahrendts with a stock grant worth up to $68 million.

Ms Ahrendts left her previous role as chief executive of Burberry, the British luxury group where she was one of the UK's best-paid executives, to join Apple last week.

Angela Ahrendts
Peter Foley | Bloomberg | Getty Images

Her stock award coincided with Apple's share price topping $600 for the first time since the end of October 2012, just days before her predecessor John Browett left the company in Apple's biggest management reshuffle in years.

Apple has been waiting since then for a replacement to Mr Browett, who joined from Dixons, a British retailer, and now heads Monsoon Accessorize, the clothing group. The unusually long vacancy in Apple's executive team came in spite of the importance its chief Tim Cook places on its retail network as an "incredible competitive advantage".

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Apple has a history of generously rewarding its executives. Mr Browett could have received more than $55 million worth of stock over four years if he had stayed at Apple, rather than lasting only six months.

On Monday, an Apple regulatory filing showed that Ms Ahrendts had been granted 113,334 restricted stock units, vesting according to time spent at the company and share price performance.

The first tranche will vest on June 1 2014 and is worth $9.8 million at Monday's closing price of $600.96. She will receive 85 per cent of the stock award as long as she remains at Apple for four years, regardless of performance.

The remaining 17,303 shares, worth $10.3 million on Monday, are tied to performance measured by Apple's relative total shareholder return.

The Apple stores' performance has waned in the absence of a permanent chief, with average revenue per store dipping from $29.4 million in the first half of 2013 to $29.1 million in the first half of its current fiscal year.

More than half of Apple's 423 stores are in the US, in spite of just 31 percent of the company's revenues in the past quarter coming from the Americas. By contrast, Burberry said last year that more than three-quarters of its stores were in emerging markets such as China.

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Apple has already said it expects to open 30 new retail stores this year, of which two-thirds will be outside the US. Recent openings in Brazil and Turkey have brought Apple's retail network to 15 countries, attracting footfall in the tens of millions every quarter.

About 11 percent of Apple's total revenue comes from its retail stores, which employ more than half of Apple's more than 80,000 full-time staff.

Ms Ahrendts is used to such challenges. At Burberry, Ms Ahrendts tripled the luxury company's share price and dragged the ageing brand into the digital world.

The Indiana-born executive was appointed Burberry's chief in July 2006 after long stints at more mass-market brands such Liz Claiborne and Donna Karan. In 2012, a survey by corporate governance group Manifest and pay consultancy MM&K found that she was the best-paid chief executive in the FTSE 350, taking home a total of £16.9 million in salary and stock awards.