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
136 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
136 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
136 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
136 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
136 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
136 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)

Popular Stories

iphone 14 pro max vs 13 max 2

Camera Comparison: iPhone 14 Pro Max vs. iPhone 13 Pro Max

Thursday September 29, 2022 7:44 am PDT by
The iPhone 14 Pro and Pro Max introduce some major improvements in camera technology, adding a 48-megapixel lens and low-light improvements across all lenses with the new Photonic Engine. We've spent the last week working on an in-depth comparison that pits the new iPhone 14 Pro Max against the prior-generation iPhone 13 Pro Max to see just how much better the iPhone 14 Pro Max can be. Subscrib ...
tony blevins car

Apple Procurement VP Departs Company After Vulgar TikTok Comment

Thursday September 29, 2022 12:38 pm PDT by
Tony Blevins, Apple's vice president of procurement, is set to depart the company after he made a crude comment about his profession in a recent TikTok video, reports Bloomberg. Blevins was in a video by TikTok creator Daniel Mac, who was doing a series on the jobs of people he spotted with expensive cars. After seeing Blevins in an expensive Mercedes-Benz SLR McLaren, Mac asked Blevins what ...
Dark Sky App Featured

Dark Sky Removed From iOS App Store Ahead of Upcoming Shutdown

Wednesday September 28, 2022 4:27 pm PDT by
The Dark Sky weather app that's owned by Apple is no longer available for download in the U.S. App Store, suggesting that it has been removed ahead of schedule. Apple acquired Dark Sky back in March 2020 and has since incorporated elements of the app into the Weather app available on the iPhone (and soon, the iPad). Dark Sky remained available for purchase as a standalone weather app...
adaptive transparency airpods pro

iOS 16.1 Beta Brings Adaptive Transparency to Original AirPods Pro

Thursday September 29, 2022 1:08 pm PDT by
The third beta of iOS 16.1 that was released earlier this week expands the Adaptive Transparency feature introduced with the second-generation AirPods Pro to the original AirPods Pro. As noted on Reddit, first-generation AirPods Pro owners who also have the AirPods beta software will now see an "Adaptive Transparency" toggle in the AirPods section of the Settings app. The 5A304A beta...
tim cook malala

Tim Cook: Not Too Long From Now, You'll Wonder How You Led Your Life Without AR

Thursday September 29, 2022 7:26 am PDT by
Speaking at Università Degli Studi di Napoli Federico II in Naples, Italy, Apple CEO Tim Cook said that not too long from today, people will wonder how they led a life without augmented reality, stressing the "profound" impact it will have on the not so distant future. At the university, Cook was awarded an Honorary Degree in Innovation and International Management and also sat down for a...
iPhone 15 to Switch From Lightning to USB C in 2023 feature sans arrow

Kuo: iPhone 14 Pro Max Popularity Could Lead to More Differentiation Between iPhone 15 Pro and iPhone 15 Pro Max

Wednesday September 28, 2022 10:22 am PDT by
Apple has seen high demand for the 6.7-inch iPhone 14 Pro Max, which could lead the company to further differentiate the next-generation iPhone 15 Pro and Pro Max, according to Apple analyst Ming-Chi Kuo. Apple could add exclusive features to the iPhone 15 Pro Max in an effort to encourage more people to purchase the larger and more expensive device. Kuo last week said that Apple asked...
iOS 16 Wallpaper Spectrum Feature

Five Wallpaper Apps to Check Out for iOS 16's New Lock Screen Depth Effect

Thursday September 29, 2022 9:08 am PDT by
One of the biggest new features in iOS 16 is a completely redesigned iPhone Lock Screen. The new Lock Screen is entirely customizable, letting you change the colors and fonts, add widgets and new wallpapers, and more to make your iPhone uniquely yours. Of course, even before iOS 16, you could customize your Lock Screen with a wallpaper of your choice. iOS 16 takes the Lock Screen wallpaper...
apple watch ultra deuglify 1

Apple Watch Ultra User Mods Titanium Casing to 'Deuglify' Design

Tuesday September 27, 2022 8:05 am PDT by
An Apple Watch Ultra user has modified their new device's casing to add a brushed finish and remove the orange color of the Action Button in an effort to make it more visually appealing. The Apple Watch Ultra offers the first complete redesign of the Apple Watch since the product line's announcement in 2014, and while the design has been met with praise from many users, some have criticized...
mx mechanical keyboard logitech

Logitech Launches New 'Designed for Mac' Mice and Keyboards

Wednesday September 28, 2022 12:01 am PDT by
Logitech today announced the launch of several new mice and keyboards that have been developed for use with Apple's Macs, including Logitech's first mechanical keyboard that has been optimized for the Mac. The MX Mechanical Mini for Mac Keyboard has a keyboard layout designed for Macs, with tools to customize shortcuts with Logi Options+. The keyboard uses Tactile Quiet low-profile switches...
iphone 14 iphone 14 plus in hand feature

iPhone 14 Is Secretly Hiding a Beloved Mac Feature

Friday September 30, 2022 3:24 am PDT by
The iPhone 14 and iPhone 14 Pro models bring over a longstanding Mac feature, but the setting to enable it is off by default. The feature, which is actually a new accessibility option, allows the iPhone to play a startup chime like the Mac. When enabled, the sound comes alongside a new shutdown chime. The Mac has featured a startup chime since 1987's Macintosh II, and the iconic "bong"...