According to documents filed with the U.S. Securities and Exchange Commission (SEC) , Apple CEO Tim Cook sold 511,000 Apple shares worth approximately $87.8 million before tax, netting $41.5 million after tax. It was the largest sell-off in 2 years. After the sale, Cook still owns about 3.28 million shares, worth about $565 million. Accounting for 0.02% of the total outstanding shares of 15.6 billion.
Tim Cook sells stocks, does Apple have doubts about the future?
According to SEC filings, the transaction was conducted in compliance with a 10b5-1 trading plan. The United States, where capitalism is prevalent, always likes to use generous stock incentive systems to attract and retain high-level executives such as CEOs. Stock options are the most common way. Usually companies will set standards and deadlines for these high-level executives to If the performance is good, you can obtain the company's equity by buying the company's stock options at a low price.
ABMedia has previously discussed whether Brian Armstrong, CEO of the exchange Coinbase, had insider information when he sold stocks before the lawsuit. But in fact, the United States has very strict regulations on stock sales by internal company executives. The SEC's 10b5-1(c) rules are formulated to avoid insiders having major inside information when trading. The sale plan must be at least 90 days away. Before formulating or modifying it, otherwise you will be vulnerable to SEC charges or lawsuits.
Therefore, Cook's stock sale this time is actually not directly related to the recent performance of Apple's stock price.
Apple CEO Cook’s rewards plan
The document also details Cook's incentive plan, because this plan is based on Apple's stock price performance from 2021 to 2023, which also explains why Cook sold shares on a large scale again after two years of absence. Here is its rewards program:
Comparison base period: first day of fiscal year 2021 vs. last day of fiscal year 2023
Comparator: Total shareholder return (TSR) of other companies in the S&P 500 Index
- If Apple's relative total shareholder return performance ranks 85% or better among S&P 500 companies during the earnings period, 200% of the target share count will be awarded
- If the performance ranking exceeds 55%, 100% of the target number of shares will be given
- Ranking at 25% or above, 25% of the target number of shares will be given
- Ranking below the 25th percentile means nothing
Apple's total shareholder return during the three-year performance period was 54.09%, ranking 141st among the 480 companies in the S&P 500 Index, ranking 70.77%. As a result, 511,000 shares that meet the performance requirements have been vested in Cook's executive trust account.
Apple shares fall from highs as investors worry demand recovery is slower than expected
Apple launched its new iPhone 15 series last month, but overheating issues and investors worried about a slower-than-expected recovery in smartphone demand have sent the company's shares down after hitting an all-time high of $198.23 in July. 12%, and the stock price closed at $174.91 yesterday.
After the sale, Cook still owns about 3.28 million shares, worth about $565 million. However, it only accounts for 0.02% of the total number of outstanding shares of 15.6 billion, which is actually not enough to shake the stock price of a company with such a large market capitalization.
