Tim Cook just made $ 750 million

Posted on

This week ten years ago, Tim Cook was named Apple’s CEO. Prior to joining Apple in 1998, Tim spent 12 years at IBM climbing the corporate ladder at the North Carolina research facility to become a master of the technological manufacturing process. After spending his time at IBM, Tim finally got his next career opportunity in 1994. In 1994, Tim was poached by a Denver-based company called Intelligent Electronics. His new job came with a signature bonus, equity, and a base salary of $ 250,000.

In 1998, Intelligent Electronics was acquired by General Electric. Tim didn’t stay after the takeover. In October 1997, Tim was hired as Compaq’s vice president of corporate materials.

A few months after joining Compaq, Tim met Steve Jobs. At the time, Apple was circling the drain. Apple’s annual revenue at the time was around $ 6 billion, down 50% from a few years earlier. The company was literally a poor product release away from bankruptcy.

Compaq, on the other hand, was a stable blue-chip tech powerhouse at the height of its success.

Contrary to common sense, on March 11, 1998, just SIX months after taking the job at Compaq, Tim became Vice President, Apple Worldwide Operations. He was personally recruited from Compaq by Jobs. The position at Apple came with a bonus of $ 500,000 and a base salary of $ 400,000.

Tim Cook $ 750 million

(Photo by Stephanie Keith / Getty Images)

In his first decade at Apple, Tim quietly rose through the ranks while overseeing the company’s manufacturing and materials processes. These processes became extremely important when Apple experienced a product development boom. The iPod. The iPhone. The iPad. All computers. Apple TV. Basically all of your gadgets.

In 2009, Tim served as CEO for the first time temporarily while Jobs was sick.

Tim was officially named permanent CEO on August 24, 2011. Steve Jobs died six weeks later, on October 5, 2011, of complications from pancreatic cancer.

In 2011, when Steve died, Apple made $ 108 billion.

Apple’s maximum market cap under Steve Jobs’ reign was $ 350 billion. Younger readers may find this hard to believe, but MANY people thought Apple would not survive without Steve Jobs. I remember financial publications back then telling people to sell their stocks because the party was over. Elvis had left the building.

Compensation plan

When Tim Cook was hired as Apple’s CEO 10 years ago, his base salary increased from $ 500,000 to $ 900,000. More importantly, he received a 10-year stock compensation plan. Tim’s share plan included 10 share awards. He received the first share grant upfront so there would be 9 more annual awards. Each grant was carried over on August 24th, the anniversary of the day it became CEO.

A portion of the equity he received was given to him just to show up. In other words, the stock price could go down and he’d get some more shares. But obviously his time as CEO wouldn’t be very long if the stock went down. The vast majority of Tim’s potential equity was performance-based.

Here’s how these grants worked: Every three years, Tim could get a HUGE percentage of stock if Apple’s stock price surpassed 2/3 of the S&P 500 for the past three years.

Tim erased those milestones.

Below is a graph of Apple’s stock price performance. I put an arrow in the place where Tim took over / Steve Jobs died.

Remember earlier in the article when we said Apple generated $ 6 billion in 1998? And remember when we said that Apple’s top market cap under Steve Jobs was $ 350 billion?

In 2020, Apple generated $ 275 billion. As of this writing, Apple’s market cap is $ 2.44 trillion.

Let’s say you had some cash in 2011 and wanted to take a risk with that no-name manager Tim Cook. If you had bought $ 100,000 worth of Apple stock on the day Tim Cook became CEO, you would have $ 1.3 million today. You could even have a little more thanks to Apple’s generous quarterly dividends.

On Wednesday of this week, Apple confirmed through an SEC filing that Steve had paid out his tenth and final stock tranche and reached the final 3-year S&P milestone. As a result, Tim was awarded 5 million shares in Apple. Technically 5,040,000 shares.

At the closing price on August 24 (the day the shares were granted) of $ 149.62, those 5 million shares were …

$ 754,084,800

And if you’ve always wanted to know what it looks like when a public company gives you three quarters of a billion dollars, here’s the incredibly boring SEC filing that made it official:

Together with his previous salaries and grants, Tim Cook’s net worth is now $ 1.5 billion. Tim is the company’s second largest single shareholder. He owns about 0.02% of the company.

Tim is one of the few people who has reached billionaire status as an employee of a company. Other billionaire employees include Jamie Dimon of JP Morgan, Sheryl Sandberg of Facebook, and Lloyd Blankfein of Goldman Sachs.

Google boss Sundar Pichai will almost certainly become a billionaire. We’re currently setting his net worth at $ 600 million. He owns approximately $ 275 million worth of vested Google shares and has a ton of untransferred shares on the way in the years to come.

Leave a Reply

Your email address will not be published. Required fields are marked *