Apple CEO Tim Cook, who is one of the richest people in the world courtesy of his role at the technology behemoth, has made a massive share sale this October soon after his company launched the latest iPhones. Apple's market capitalization is in the trillions of dollars, and Mr. Cook is one of the highest paid executives in the world due to his compensation package that is beefed up by lucrative stock grants and award. However, even though Mr. Cook took a pay cut for his 2023 compensation over last year's figure due to the tough macroeconomic environment, he cashed out on millions of dollars of stock in October according to his SEC filings.
Apple CEO Sells A Little Over Half A Million Of Shares As Stock Posts 38% Gains Year To Date
The start of 2023 was marked by a lot of turmoil in the big tech sector as interest rates soared and high inflation increased the costs of doing business and cut down consumer purchasing powers. Most big tech firms, which had gone on a hiring spree after the coronavirus pandemic to meet booming demand for their products and services, started laying off workers in a set of horror stories that saw some professionals with decades of experience being let go on a moment's notice.
However, Apple bucked this trend and not only did the firm lag its peers when it came to layoffs, but the firm's proxy statement filed for its 2023 annual shareholders meeting outlined that its chief Mr. Tim Cook had decided to take a 40% compensation cut. The document outlined that Mr. Cook's target total compensation for 2023, which includes his base pay and stock awards, would be $49 million this year, a sizeable decrease over 2022's $84 million.
The shares sold by Apple's top executive were worth $87.8 million, and they mark a small portion of his overall stock holdings. After selling the 511,00 shares, Mr. Cook still owned a cool $566 million based on the intraday share price today. This makes him one of the richest people in the world, and the SEC filing contained additional details that highlighted the nature of the shares sold.
The document listed in the footnotes that the 511,000 shares sold by the executive were part of Restricted Stock Units (RSUs) awarded to him in September 2020. They were awarded based on Apple's total shareholder return (TSR) between the start of its fiscal year 2021 to the end of its fiscal year 2023. Apple's fiscal year starts in October, and its fiscal year 2023 ended in September this year.
As part of these shareholder return computations, Apple's per share value, which assumes that dividends are reinvested, was calculated to sit at $116.95 for the beginning of the time period, while the value for the closing was $180.20. This reflects an approximately 54% gain, which ranked it at 141 out of the 480 S&P500 companies included for comparison. Based on this, the firm's returns were in the 71st percentile, and Mr. Cook received 511,000 Apple shares.
Not only did the executive cash out this October, but he also received 292,040 restricted stock units. Settlement dates for these units stretches out to as far as 2028, with the earliest settlement date being in 2026. Mr. Cook also owns 3.28 million of Apple shares, and his 2023 compensation includes $6 million in cash incentives, $3 million in base salary and a $40 million equity award out of which 25% is time based and 75% is performance based.
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