Apple CEO Tim Cook has passed up on about $75 million in dividend payments due him over the next 9 years. Apple CEO Tim Cook has passed up about $75 million in dividend payments he would be due when his massive collection of more than 1 million shares vests in the next decade, according to a filing with the U.S. Securities and Exchange Commission (SEC).
The company's submission Thursday announced that Apple will credit executives who have received "restricted stock unit" awards with what it called "dividend equivalents." equal to the dividends it will pay holders of common stock starting later this year.
In March, Apple bowed to investor pressure and said it would use some $45 billion of its massive cash holdings to, in part, pay quarterly dividends, a break from past practice when Steve Jobs led the company.
The dividend payments will amount to $2.65 per share per quarter, or $10.60 per share annually. The program will cost Apple about $10 billion the first year.
Cook has declined the dividend equivalents.
"At Mr. Cook's request, none of his restricted stock units will participate in dividend equivalents," said the Apple SEC filing. "Assuming a quarterly dividend of $2.65 per share over the vesting periods of his 1.125 million outstanding restricted stock units, Mr. Cook will forego approximately $75 million in dividend equivalent value."
Cook received the bulk of his restricted stock unit, or RSU, holding last year in a 1-million RSU grant given him in late August 2011 by the Apple board of directors. The grant was announced just after Cook was promoted to CEO, but before the death of former CEO Steve Jobs.
Half-a-million RSUs will be awarded to Cook in August 2015 if he is still with Apple, while the second 500,000 will be given to him in August 2021, again only if he is still employed by the company.
At Apple's current share price as of noon Friday, Cook's 1.125 million RSUs would be worth over $629 million if they were awarded today.
Apple's SEC filing did not give a reason for Cook's decision to forgo the dividend equivalents.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.
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