Forum Post: Greedy Apple Execs Divert $360mil from Shareholders without Permission
Posted 12 years ago on Nov. 8, 2011, 2:26 p.m. EST by snidelywhiplash
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Steve Jobs must be rolling over in his grave over what might go down as the biggest corporate heist in history. Six execs at Apple were each given shares worth $60mil last week. What new accomplishment did they achieve? What risk did they take to warrant the reward? Absolutely none! It was described as a payment "for future services". The timing of this heist, so close to Steve Jobs' recent passing, can not be coincidental.
Where is the outrage from shareholders over this theft of their shareholder value? Where is the outrage from the nation over companies that continue to reward corporate executives with outrageous upside profits while punishing shareholders (and taxpayers) with the downside losses when things blow up.
If I was on Apple's Board, I would tell these executives that if they want to make $60mil dollars they need to do it the way Steve Jobs did: come up with a good idea, mortgage your home and maybe your parents home, take significant risks that, if they are successful, payout a huge sum. To take $60mil simply for keeping a seat warm is not reward, it is theft. A $60mil payment with no risk taken is a corruption of the basic principle upon which capitalism was founded: risk = reward. no risk = no reward.
These were not even Stock Options which can easily be deemed worthless if Apple stock drops. These were RSUs, which come with a convenient strike price of $0, which means they still get rewarded with $30mil each even if they make inept decisions that drive Apple's stock down by half.
The Apple Board has set up rules that do not even allow the shareholders to vote on these obvious diversions of corporate value. Their answer: if you don't like it, then sell your Apple stock and buy stock in a company who has governance you approve of. Unfortunately there are none to be found.
Obama: your buddy Steve is gone, his executive team is looting the company. Are you going to step in and say something or are you just part of the problem?
It's actually not the amount, it's the perversion of the principle of risk/reward that pervades corporate America. If specific reward is not tied to specific risk, then these payouts have no financial basis, they happen because cozy Boards have gamed the system to shift risk to shareholders while keeping upside to themselves and a few insiders.
Steve Jobs deserved the $4bil, he risked his entire fortune a few times. That type of risk taking deserves unlimited upside.
These guys took no significant new risks and deserve no significant rewards.
And every OWS protester that owns an apple product funded it. Great job.
Even more reason for Apple shareholders to be beaming. Again, nothing to see here. Next.
If these execs are considered important for Apple, $60 million a piece really isn't all that much. It's all about competition. They give this money for future services because they don't want to lose these people. They consider them important. Apple pays millions to Tim Cook, but he makes them millions more. The reason Apple is doing so well at the moment is because they have great people at great positions. They don't want to lose them to Microsoft, IBM, Google, or some other company. It's all about offer and demand. I would pay you $60 million dollars if I believed you could make me millions more.
At the end of the day, Apple shareholders are beaming because it's one of the US companies that is doing the best. No problem here. Next.