How Corporate Logos evolve

An illustration by the team at The Logo Company.

Also check out this link which shows the evolution of the 3M logo, its cool!

Game of Phones (and content) (and hardware) (and search)

A great article by The Economist:  Another Game of Thrones

And it has this kickass image as well. Make sure you enlarge and enjoy!

Restricted Stock and Dividend Equivalents

Yeah, about that 'Think Different' post I wrote on Tim Cook. Some other things to note, because its not as simple as it looks.

Basically, the story goes that Apple's CEO gave up $75 million in dividend income, over a period of 10 years. Now I was happy amazed to see someone voluntarily give up that much amount of money. After a while, I was also puzzled. How could he get dividends on stocks that he doesn't even own right now? 

So I went to the SEC filing. Turns out I got confused between Stock Options and Restricted Stocks (which is what Tim Cook owns). Stock Options give an employee the right to purchase stock in the future, while restricted stock already belong to the employee, but he just isn't allowed to vest it or sell it. That's my (rather) crude interpretation of the situation. 

Still, dividend equivalents are something new. From the filing below, I'm able to make out that restricted stock do not participate in the normal dividend payout, which is why they had to pass a resolution to basically say that all restricted stocks will also get a cash amount (not a dividend) equal to the dividend amount. 

Of course, some companies pay out the dividend equivalent as part of an executive's yearly pay (which is a highly dubious move, IMHO) . Apple seems to be doing the right thing in vesting the dividend equivalent along with the stock itself.

Again, Bravo TC! 

Item 5.02.    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers (e) Compensatory Arrangements with Certain Officers.On May 24, 2012, the Compensation Committee (the "Committee") of the Board of Directors of Apple Inc. (the "Company") approved amendments to each outstanding and unvested restricted stock unit award granted by the Company to its employees (other than Timothy D. Cook, the Company's Chief Executive Officer). The amendments provide that if the Company pays an ordinary cash dividend on its common stock, each award will be credited with an amount equal to the per-share cash dividend paid by the Company, multiplied by the total number of restricted stock units subject to the award that are outstanding immediately prior to the record date for such dividend. The amounts that are credited to each award are referred to as "dividend equivalents." Any dividend equivalents credited to an award will be subject to the same vesting, payment and other terms and conditions as the unvested restricted stock units to which the dividend equivalents relate. Depending on the domicile of the employee, accumulated dividend equivalents will either be paid in cash or used to offset employee taxes due upon vesting of the restricted stock units.

The Committee determined these amendments were appropriate in light of the Company's announcement on March 19, 2012 that it intends to commence paying ordinary cash dividends of $2.65 per share to its shareholders on a quarterly basis sometime during the fourth quarter of its 2012 fiscal year. As restricted stock units are not outstanding shares of common stock and thus would not otherwise be entitled to participate in such dividends, the crediting of dividend equivalents is intended to preserve the equity-based incentives intended by the Company when the awards were granted and to treat the award holders consistently with shareholders.

At Mr. Cook's request, none of his restricted stock units will participate in dividend equivalents. Assuming a quarterly dividend of $2.65 per share over the vesting periods of his 1.125 million outstanding restricted stock units, Mr. Cook will forego approximately $75 million in dividend equivalent value.

Think different

This, for me, is astounding.

Apple CEO gives up $75 million in dividend income

Tim Cook decided to forgo the quarterly dividends accrued on the 1.125 million shares that are due to him in 2016 and 2021. True, this would have been over a period of 36 quarters, but this is still a huge amount of money. More than what most of us will make over a lifetime. And the major point being, no one asked him to! 

There was no pressure from shareholders, the company is doing insanely well and I doubt this was even in anyone's mind. As far as I can see, Tim Cook is basically doing this so that no one can (someday in the future) turn around and say that he instituted the dividend program to enrich himself.

There might have been other CEOs who've taken paycuts but those are generally in companies in some form of crisis or the other, like the $1 salary of various Wall-Street CEOs. But this form of simply walking away from a huge pile of cash is something that I haven't yet seen in my admittedly fledgling working life.

Contrast this with these notes from Dell: Michael Dell is making hay while his company drowns around him.

(As an aside, I'm sure Dell regrets the day he ever made that quote about shutting down Apple and returning money to the shareholders. One slip, and unfortunately that's how most people remember him for now.)

Will we hear someone from India doing the same? Forgo money that is legally and with utter validity due to him? Have we ever had something like this, ever?

Look forward to your thoughts!