Another shareholder-friendly move from Tim Cook and the board raises the question: Is this new tack better, or does it signal a company too concerned with appearances?
Apple's latest move involves executive pay. On Friday after the markets closed, the tech giant quietly filed documents that describe a notable shift in the way senior vice presidents, and Cook himself, will get stock awards.
They used to get a big bundle of stock just for sticking around. Now the award size will depend on how well shareholders have fared over a three-year period. If Apple's total shareholder return is in the top third of the S&P 500, they'll get more. If it's in the bottom third, they'll get less. (The exception is Tim Cook; he won't receive more stock if the shares do well, only less if they do poorly.)
How big a financial impact is this likely to have on the executives? Not enormous. The last two-year stock award Apple executives received was worth just over $66 million. The stock price has fallen since then. But look at it this way: Before, maybe Apple's top execs could expect to pull in about $50 million in stock every two years at today's prices. Now they'll probably get closer to $38 million worth if Apple's shares and dividend are doing poorly relative to the rest of the S&P 500, $66 million if they're doing well.
Those shares come on top of cash salary and bonus that can be as high as $2.4 million per year ($800,000 in salary, $1.6 million in bonus) if executives do a great job.
Undoubtedly, Apple's executive pay structure has changed over the past two years since Tim Cook took over and Steve Jobs passed away. Apparently Jobs wasn't a big fan of cash compensation. Senior executives had below-average cash salaries and bonuses for a company Apple's size, but sizeable stock awards. The stock awards were structured to keep management thinking about the long term; no annual grants, no stock options that were valuable only if the shares got a big pop from when they were granted.