By Poornima Gupta
SAN FRANCISCO, June 21 Apple Inc O> Chief
Executive Tim Cook's one-time stock award worth over $413
million as of Friday is now partly subject to the performance of
the shares, a move that followed discussions with the company's
Cook, who has presided over a 42 percent drop in Apple's
share price since it touched a high of $705 in September,
approached the board to impose a performance criteria on his
yet-to-be-vested stocks, according to a filing on Friday.
Under the new system, part of Cook's grant is subject to
"Total Shareholder Return", a measure of Apple's stock
performance and dividends based on public Standard & Poor's
The company's board had in January of 2012 granted Cook one
million restricted stock units (RSUs) to signal its confidence
in Cook after Steve Jobs turned over the helm of the iPhone and
iPad maker to his long-time lieutenant in August of 2011.
"In outreach discussions this year with many of our largest
shareholders, we heard that they believe it is appropriate to
attach performance criteria to a portion of our future executive
stock awards that have been entirely time-based in the past,"
the filing said.
Apple, beginning Friday, is also including a performance
element in new stock awards to all top executives.
Shares of Apple, once among the most desirable of portfolio
holdings, fell out of favor abruptly last September on growing
uncertainty about the company's ability to fend off
unprecedented competition from deep-pocketed rivals such as
Samsung Electronics, Amazon.com and Google
Under Cook, the company has gone through one of its longest
recent product droughts, with no new devices. The last device
launched was the iPad mini last October, the first all-new
product under Cook.
Cook's stock award was previously based on a pre-determined
time-based vesting schedule of 10 years. Now of the 1 million, a
block of 100,000 shares each will vest in 2016 and 2021.
The rest of the 800,000 shares will vest equally every year,
over 10 years and will be subject to the performance criteria.
Half of the 800,000 is subject to the performance of Apple
shares. The other half will vest on an annual basis as long as
Cook remains with Apple.
Apple said in its filing Total Shareholder Return for a
period of time is based on the change in its stock price during
that period, taking into account any dividends paid, which are
assumed to be reinvested in the stock.