Apple CEO Tim Cook last Friday was awarded 560,000 shares of Apple stock as payment for his service as Apple's CEO and Apple's strong performance under his leadership.
Following the award, Cook this week sold more than 265,000 of those shares at prices ranging from $216.96 to $218.54, netting him nearly $57.8 million. The remaining 294,840 shares worth more than $63 million were withheld by Apple for taxes.
As with all transactions where Apple executives sell stock, the sale was done under a Rule 10b5-1 trading plan that was adopted on May 4, 2018.
The stock Cook received last week included 280,000 vested restricted stock units (RSUs) provided to him as part of his compensation as CEO and another 280,000 vested RSUs awarded because Apple achieved a higher shareholder return than at least two-thirds of other companies in the S&P from August 25, 2015 to August 24, 2018.
Mr. Cook's award provides that if Apple's relative TSR performance is within the top third of the companies that remain in the S&P 500 for the entire performance period, the 280,000 performance-based RSUs vest in full. If Apple's performance is in the middle third, the RSUs will be reduced by 50%, and if Apple's performance is in the bottom third, the RSUs will be reduced to zero. Apple needed to achieve a TSR of at least 56.23% to outperform the middle third of the companies in the S&P 500 for the performance period, and at least 19.94% to outperform the bottom third of the companies. Apple's TSR for the three-year period was 89.94%, which ranked 50th of the 423 companies that were included in the S&P 500 for the entire period and placed Apple in the 88th percentile. Therefore, all 280,000 of the RSUs subject to performance requirements vested.
Cook is set to receive an additional 560,000 shares each year for the next three years if he remains Apple's CEO and Apple's shareholder return continues to be among the top-third of companies in the S&P 500. Cook will also see 700,000 RSUs vest on August 24, 2021.
After selling the stock that he received this year, Cook continues to own 878,425 shares, worth close to $193 million at today's closing price of $219.70.
In the past, Cook has said that he plans to donate the majority of his fortune to charity. Cook last week donated almost $5 million worth of Apple stock to an unnamed charity.