New changes will be made in Apple’s stock measuring. There will be some new rules related to CEO’s bonuses. This could mean bringing new payment limits for the big names, like Tim Cook, in the company. Based on the stock prices, few days ago Apple has changed the whole compensation policy. It involves bonus earnings for the next year for Apple’s CEO.
This change has been approved on a board meeting on Friday. According to the company, Tim Cook has applied for this change. Cook has a big amount of restricted stocks right now (800,000) and by 2021 they will finish vesting to 80,000. On the first deal between Cook and Apple, it was said that if he stay like CEO he’ll be awarded the full amount of stocks. With these changes, this no longer exists. In the policy, it says that if Apple performs better, Cook won’t be awarded with the original amount.
The new terms which were presented are more based on the company’s performance. Still, some time must pass before we see how this will work out for Apple’s CEO, Tim Cook. Apple’s performance will be measured by the stock prices in comparison with others 500 top companies also tracked by stock price. This number will be split in thirds to see where Apple will end up. If Apple performs well to find itself in the top third, the stock awards will remain like they used to be. If Apple performs anything below the expectations and find itself somewhere in the middle, there will be some payment cuts. Like the note says, this cut may be condensed to half, if Apple is placed in the bottom third.
Back in 2011, Apple’s executives along with Tim Cook received really good bonuses. This followed some leadership changes after Steve Job’s era. The executives were awarded with more than $50 million in stocks last year. From what we can see now, that was the last big award amount. This new change involves $86.5 million that were vested for taxes.
These are some hard terms but maybe this will help the company get back on track and return its stock prices back where it should be. This doesn’t mean that they will not receive a penny as an award, but they will get what they deserve. If the performance of the company meets the expectations, they receive the same. If the performance hits below average, there will be some serious cuts.