Apple Awards 1-million Shares to New CEO Tim Cook

Apple co-founder Steve Jobs most recently unveiled iCloud at the Apple Developers Conference WWDC 2011 in San Francisco Source: AP

Apple filed an 8-K report (firms are required to disclose new material events as they occur in an 8-K form, also known as a “current” form ) with the U.S. Securities and Exchange Commission (SEC) that reveals the company has awarded its new CEO, Tim Cook, 1,000,000 Apple shares worth $383.58-million based on today’s closing price of Apple stock (NASDAQ:AAPL).

Apple earmarked 1,000,000 common shares to Mr. Cook that will be converted in to cash on two different dates, Aug 24, 2016, and five years later on Aug 24, 2021, contingent on Cook’s continued employment at Apple. The number of shares converted will be evenly divided between the two dates.

The stock allocation should not be misconstrued as long call options because the shares will be converted into cash at the closing price on the respective dates, that is, there is no strike price, and the allocation is in fact already like an in the money stock option.

 The value of the earmarked shares could fluctuate considerably from today’s value given the large time span going forward and it would be impossible to form a reasonable basis of their discounted value today.

Tim Cook was appointed to CEO after the exiting CEO Steve Jobs resigned from his post for unconfirmed reasons, largely believed to be due to health issues.

Steve Jobs will now serve as Chairman of the Board after the Board of Directors appointed him to the post and will continue to play a critical role at the company, according to Apple.

Tim first joined Apple in 1998 as Senior VP Worldwide Operations and was subsequently promoted to chief operating officer only six years later after improving efficiency and profitability largely from restructuring Apple’s manufacturing operations.

In an internal letter to Apple employees only days ago, Tim maintained the company was not going to change despite the shuffle in top management.