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
121 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
121 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
121 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
121 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
121 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
121 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

iOS 14 on iPhone feature emergency

Apple Releases iOS and iPadOS 14.7.1 With Fix for Touch ID Apple Watch Bug

Monday July 26, 2021 9:48 am PDT by
Apple today released iOS and iPadOS 14.7.1, minor bug fix updates that come just a week after the release of iOS 14.7, software that introduced new Apple Card features and support for the MagSafe Battery Pack. The iOS and iPadOS 14.7.1 updates can be downloaded for free and the software is available on all eligible devices over-the-air in the Settings app. To access the new software, go to...
iPad mini pro feature 2

iPad Mini 6 to Feature 8.3-Inch Display With No Home Button and Narrower Bezels

Monday July 26, 2021 12:26 pm PDT by
The sixth-generation iPad mini that's in the works will have an 8.3-inch display, according to display analyst Ross Young. That will be larger than the current 7.9-inch display, with the larger size due to the removal of the Home button and a narrower bezel design. Rumors about the iPad mini 6 have been picking up in recent weeks ahead of its prospective launch this fall. Apple analyst...
iphone 12 pro gold

Report: iPhone 14 Pro Models to Feature Tough Titanium Alloy Chassis

Monday July 26, 2021 1:12 am PDT by
Next year's "iPhone 14" series is expected to feature high-end models with a new titanium alloy chassis design, claims a new investors report by JP Morgan Chase. According to the report, the use of titanium alloy will be one of the biggest changes to the case design in the 2022 iPhone series, and Foxconn will be the exclusive manufacturer of the titanium frames for the high-end models....
nothing ear 1 buds 1

Nothing 'Ear (1)' True Wireless Earbuds Launch to Take on AirPods Pro With ANC and Unusual Design for $99

Tuesday July 27, 2021 7:57 am PDT by
Nothing, a new brand from OnePlus founder Carl Pei, has today officially launched the "Ear (1)" true wireless earbuds after months of anticipation around the company's AirPods Pro rival. The Ear (1) features an in-ear design, Active Noise Cancelation, Bluetooth 5.2, IPX4 water resistance, and a charging case with Qi-compatible wireless charging and a USB-C port. Fast pairing is supported on...
apple mac business page

Apple Shares 11 Reasons Why Business Users Should Choose Macs

Monday July 26, 2021 11:35 am PDT by
Apple today updated its Apple at Work website with a new section dedicated to the Mac, which offers up 11 reasons why "Mac means business." On the webpage, Apple highlights the M1 chip as the number one reason why business users should choose a Mac, offering up an M1 overview [PDF] that explains the benefits of the M1 chip. The information isn't new, but it does provide a look at all of...
imac with accessories

Larger Redesigned High-End iMac Rumored to Launch Next Year

Monday July 26, 2021 3:45 am PDT by
Apple's larger redesigned iMac will arrive sometime in 2022 rather than later this year, according to the leaker known as "Dylandkt." On Twitter, Dylandkt claimed that Apple's "high end iMac" is not expected to release in the fourth quarter of 2021 alongside Apple's "M1X Macs" – a reference to Apple's redesigned MacBook Pro models – because "Apple simply does not want their devices to...
General iOS 14

iOS 14.7.1 and macOS Big Sur 11.5.1 Patch Security Vulnerability That May Have Been Actively Exploited

Monday July 26, 2021 11:55 am PDT by
Apple today released unexpected iOS 14.7.1 and iPadOS 14.7.1 updates to the public, and according to a newly released support document, the software addresses a serious security vulnerability that may have been exploited in the wild. Apple says that an application may have been able to execute arbitrary code with kernel privileges due to a memory corruption issue. "Apple is aware of a report ...
apple bitcoin hack

Is Apple Really Buying Bitcoin?

Monday July 26, 2021 3:07 am PDT by
A large number of websites and posts on social media are stoking rumors that Apple has purchased $2.5 billion worth of bitcoin in the company's first move into cryptocurrency, but is there any validity to the claims? Many people are citing the fact that Apple was looking for a Business Development Manager with experience in alternative payments, including cryptocurrency, earlier this year as ...
tesla red orange bg feature

Tesla CEO Elon Musk Takes Shots at Apple During Earnings Call

Monday July 26, 2021 4:53 pm PDT by
During a Tesla earnings call that took place today, Tesla CEO Elon Musk spent time sniping at Apple, reports CNBC. Musk criticized Apple's "walled garden" and made comments on the company's cobalt use. In a discussion about plans to allow Tesla competitors to use the Tesla electric vehicle charger network, Musk said that Tesla does not want to create a walled garden to "bludgeon" Tesla...
FaceID iMac REREREREMIX

Gurman: Face ID on the Mac Coming Within a 'Couple of Years'

Sunday July 25, 2021 7:09 am PDT by
Apple plans to bring Face ID to the Mac within the next "couple of years," respected Bloomberg journalist Mark Gurman said today in the latest edition of his Power On newsletter. In the newsletter, Gurman says that he believes Apple's ultimate goal is to shift all of its products to Face ID, including the lower-end iPhones such as the iPhone SE and the iPad Air, which feature Touch ID....