A pair of filings with the U.S. Securities and Exchange Commission reveal that Apple executive Scott Fortsall and board member Mickey Drexler each sold off tens of thousands of shares of Apple stock on Friday, netting millions of dollars each.

forstallForstall, who serves as senior vice president of iOS Software and has been a fixture in Apple's keynote presentations and media events, sold off 64,151 shares of Apple stock on Friday, netting roughly $38.7 million. Forstall gained 120,000 shares of Apple stock last month as a 2008 retention bonus of restricted stock units converted to actual stock. 55,849 shares were immediately sold off at that time to account for the taxes due on the conversion, and Forstall held on to the remaining shares until last Friday.

Following Friday's transaction, Forstall holds 2,988 shares of Apple stock, worth roughly $1.75 million at today's share price and the same number of shares he held prior to last month's vesting of his 2008 retention bonus. Forstall is also in line to receive a number of other stock grants should he remain with the company over the next several years, including a 150,000-unit grant that will vest in equal portions next year and in 2016. A separate grant of 100,000 units will vest in 2014.

Meanwhile, longtime Apple board member Mickey Drexler, who serves as Chairman and CEO of J. Crew and was previously President and CEO of The Gap, has cashed in on stock options dating back nearly a decade in order to reap a substantial windfall.

Drexler exercised a set of 20,000 options from 2003 priced at $9.16 each and a second set of 20,000 options from 2004 priced at $14.205 each, selling off all 40,000 shares on Friday for $24.1 million. After accounting for the exercise prices on the options, Drexler netted close to $23.7 million. Drexler continues to hold 584 shares of Apple stock worth roughly $384,000 at today's share price.

Top Rated Comments

vrDrew Avatar
117 months ago

Side question: When this many shares are sold, is this when Apple use some of its cash to buy back shares in order to keep the price from dropping? So Apple coordinates with the employee to prevent the price from dipping?

Apple (NASDAQ: AAPL) has an average daily volume of more than 24 million shares traded. Drexler and Forstall together sold about 100,000 shares, or less than half a percent of the average daily "float." Its possible - but unlikely - that this many shares might exert some downward market pressure.

For obvious reasons, executives exercising options use some discretion in timing their transactions. They want to get the best price possible (consistent with their obligations under Securities law) so they typically schedule their options exercises so as not to coincide with significant company announcements.

Final note: Board Member Mickey Drexler exercised options issued in 2003 and 2004, with prices of $9.16 and $14 per share. Apple will be able to deduct from its US corporate taxes the difference between the option price and the sales price. Obviously an additional 40,000 shares publicly traded will have a certain dilution effect, but one certainly wonders if this is a great as the benefit the company will reap from a $23 million non-cash tax deduction. On the other hand, the US Treasury will benefit from the personal income taxes Forstall and Drexler will pay on their sale, which will likely be at the long-term capital gains rate of 15% - or considerably less than a Taco Bell manager would pay on a $5,000 bonus on top of his $55,000 annual salary. Something ain't right with the US tax code.
Score: 3 Votes (Like | Disagree)
firewood Avatar
117 months ago
greed
So I suppose if your employer gave you this big a bonus, you would give it all to charity? Did you give 99% of your income to charity last year as well? Good for you!

Pro tip: ... ain't using his $38 million to create jobs. I can guarantee you that.
Really? That's what they said about all the millionaire's buying yachts a few years back. So they taxed them big. The next year, thousands of blue collar boat builders in the U.S. lost their jobs... jobs that you say nobody is creating.

Rumor is that there are thousands of out-of-work construction workers, interior decorators, and etc. just waiting for a mini building boom after the post facebook IPO waiting period.
Score: 2 Votes (Like | Disagree)
Rocketman Avatar
117 months ago
55,849 / 120,000 = 46.5% paid in taxes.

"Restricted stock and RSUs are taxed differently than other kinds of stock options, such as statutory or nonstatutory employee stock purchase plans (ESPPs). Those plans generally have tax consequences at the date of exercise or sale, whereas restricted stock usually becomes taxable upon the completion of the vesting schedule. Restricted stock plans are not eligible for capital gains treatment, and the entire amount of the vested stock must be counted as ordinary income in the year of vesting."

Do your homework before you claim "greed", and how his "effective tax rate is so low".

Even if it *had* only been 15% he would have paid more in taxes *in one year* than you will probably make in your lifetime.
I was going to post about that too. It looks like it is taxed as ordinary income, not long term capital gains. That's some bad tax planning. He probably should have put it in his IRA/WBP over the years to at least defer the taxes.

So Apple was taxed on it, gave it to Scott, then he was taxed on it again. When the government gets 25/42 that means the owners only get .75x.68 or 51% . It is bad social policy to give the government 50% of the fruits of people's labor. It destroys capital that would otherwise go into expanding jobs either with direct investment or through savings which banks leverage into business loans and mortgage loans of benefit to real people in their real lives.

Rocketman
Score: 2 Votes (Like | Disagree)
econgeek Avatar
117 months ago
The reason for selling, and for selling all of what just vested, is because they need to diversify. All their net worth (and their employer) is Apple.

If you have 400,000 shares still vesting, no reason not to sell the 100,000 that just vested-- you still have 400,000.

As for what apple's going to do-- I expect it will go down. It might visit $550, or $500, or maybe $450. But that's the short term.

If you're an investor, you should be more concerned about what apple will be like in a year or three.... and in three years I expect Apple will be over $2,200 a share.

No Joke.
Score: 2 Votes (Like | Disagree)
applefanDrew Avatar
117 months ago
I wonder what it's like to go home, in one day, with $38.1 million. I'll never know…
Score: 2 Votes (Like | Disagree)
kenfused Avatar
117 months ago
They are required to date transactions months in advance or longer, so they cannot be accused of insider trading or dumping the stock before bad news. This is common practice.
Score: 2 Votes (Like | Disagree)

Top Stories

siir apple event april 20

Siri Reveals Apple Event Planned for Tuesday, April 20

Tuesday April 13, 2021 12:04 am PDT by
Siri has apparently prematurely revealed that Apple plans to hold an event on Tuesday, April 20, where the company is expected to reveal brand new iPad Pro models and possibly its long-awaited AirTags trackers. Subscribe to the MacRumors YouTube channel for more videos. Upon being asked "When is the next Apple Event," Siri is currently responding with, "The special event is on Tuesday, April...
apple event spring loaded

Apple's 'Spring Loaded' Event Officially Announced for Tuesday, April 20

Tuesday April 13, 2021 9:04 am PDT by
Following an overnight leak by Siri, Apple today officially announced that it will be holding a special "Spring Loaded" event on Tuesday, April 20 at 10:00 a.m. Pacific Time at the Steve Jobs Theater on the Apple Park campus in Cupertino, California. As with all of Apple's 2020 events, the April 2021 event will be a digital-only gathering with no members of the media invited to attend in...
Google maps feaure green

Google Maps App for iOS Finally Updated After Four Months

Monday April 12, 2021 10:03 am PDT by
Following the completed rollout of App Privacy labels for its App Store apps, Google today updated the Google Maps app for the first time in four months. Apple in December began requiring all new app submissions and app updates to include App Privacy labels, detailing the data that is collected by the app so consumers know what they're sharing. Google didn't begin implementing App Privacy ...
pixel watch prosser leak

Google Pixel Watch Allegedly Leaks with Circular Design, Rumored to Launch in October

Monday April 12, 2021 2:49 am PDT by
Renders of Google's first smartwatch, codenamed "Rohan," have been shared by Jon Prosser, showing that Google plans to adopt a circular design for its flagship wearable watch. Prosser shared the renders in an episode of his YouTube show "Front Page Tech," in which he claims they were made based on marketing material he had seen from a source within Google. The renders show that the Pixel...
apple event hashflag

Twitter Hashflag for April 20 Apple Event Goes Live

Tuesday April 13, 2021 2:21 pm PDT by
Following the overnight Siri leak and subsequent announcement that Apple will hold a media event on Tuesday, April 20, a new Twitter hashflag has appeared to help provide visibility for the event on the platform. For the last several recent events, Apple has utilized hashflags, which are little icons next to hashtags on Twitter, as a way to market its events. The company first started the...
macos catalina serial number

Apple Preparing Rollout of New Randomized Product Serial Numbers Ahead of 'Spring Loaded' Event

Wednesday April 14, 2021 2:08 am PDT by
Apple is advising its authorized premium resellers and dealers to prepare for new products with 10 and 12 digital serial numbers, days ahead of when it's expected to reveal a slew of new products. MacRumors previously reported that Apple plans to switch to randomized serial numbers for future products starting in early 2021. The company now seems to be preparing for that roll-out, telling...
iphone12cameras

Kuo: 2022 iPhones to Feature 48-Megapixel Camera, 8K Video, and 6.1 and 6.7" Sizes With No 5.4" Mini Option

Tuesday April 13, 2021 10:45 pm PDT by
The upcoming 2022 iPhone lineup will feature two 6.1-inch devices and two 6.7-inch devices, with no mini-sized 5.4-inch iPhone, well-respected Apple analyst Ming-Chi Kuo said in a note to investors that was seen by MacRumors. Two of the iPhones will be high-end models and two of the iPhones will be lower-end models, similar to the current iPhone 12 lineup. Apple introduced the 5.4-inch...
AppleTV and HomePod Feature

Bloomberg: Apple Working on New Apple TV With Integrated HomePod Speaker and FaceTime Camera

Monday April 12, 2021 3:32 am PDT by
Apple is working on a combined Apple TV with HomePod speaker that has a camera for video calls through a connected television set, according to Bloomberg's Mark Gurman. From the report: The company is working on a product that would combine an Apple TV set-top box with a HomePod speaker and include a camera for video conferencing through a connected TV and other smart-home functions,...
epic iap feature 3

Tim Cook Says App Store Would Become a 'Flea Market' if Third-Party Payment Systems Were Allowed

Monday April 12, 2021 9:41 am PDT by
In a recent interview with the Toronto Star, Apple CEO Tim Cook spoke about a wide variety of topics, ranging from App Tracking Transparency to Apple's ongoing legal battle over App Store policies with Fortnite creator Epic Games. Notably, Cook said that Epic Games' desire for Apple to let developers offer their own payment systems in apps "would make the App Store a flea market":At the...
tim cook toronto star

Tim Cook Says Apple is 'Not Against Digital Advertising' Ahead of iOS 14.5 Launch With App Tracking Transparency

Monday April 12, 2021 8:00 am PDT by
Starting with iOS 14.5, iPadOS 14.5, and tvOS 14.5, Apple will be requiring apps to receive a user's permission to track their activity for targeted advertising purposes, as part of a privacy measure known as App Tracking Transparency. Ahead of App Tracking Transparency being enforced, Apple CEO Tim Cook has participated in a privacy-focused interview with the Toronto Star, telling the...