Apple CEO Tim Cook was recently awarded 560,000 shares of Apple stock for serving as Apple’s CEO and for Apple’s strong performance under his leadership.
After receiving the award, Cook sold more than 265,000 of those shares at prices ranging from $493.50 to $500.11, netting him somewhere around $131.7 million, according to a filing published today by the SEC. The remaining 294,840 shares worth over $148 million were withheld by Apple for taxes.
As with all transactions where Apple executives sell stock, the sale was done under a Rule 10b5-1 trading plan that was adopted by Cook’s trust on February 28, 2020.
Cook’s stock award included 280,000 time-based RSUs and 280,000 performance-based RSUs that were based on Apple’s total shareholder return relative to other companies in the S&P 500 over the three-year period from August 25, 2017 through August 24, 2020. Apple achieved a higher shareholder return than at least two-thirds of the other companies in the S&P during that time period.
Mr. Cook’s award provides that if Apple’s relative TSR performance is within the top third of the companies that remain in the S&P 500 for the entire performance period, the 280,000 performance-based RSUs vest in full. If Apple’s performance is in the middle third, the RSUs will be reduced by 50%, and if Apple’s performance is in the bottom third, the RSUs will be reduced to zero. Apple needed to achieve a TSR of at least 48.28% to outperform the middle third of the companies in the S&P 500 for the performance period, and at least -3.89% to outperform the bottom third of the companies. Apple’s TSR for the three-year period was 194.89%, which ranked 7th of the 442 companies that were included in the S&P 500 for the entire period and placed Apple in the 99th percentile. Therefore, all 280,000 of the RSUs subject to performance requirements vested.
Cook is set to have another 700,000 of his RSUs vest on August 24, 2021, based on his original employment agreement with Apple. Cook’s net worth surpassed $1 billion this year, according to estimates calculated by Bloomberg‘s Billionaires Index.
Apple’s stock has soared past the $500 mark this week, and the company’s market value has hit $2 trillion. After selling the RSUs provided this year, Cook continues to hold 837,374 shares of Apple stock worth $418 million.