Showing posts with label Apple. Show all posts
Showing posts with label Apple. Show all posts

Monday, 26 January 2015

Apple spent $700,000 on CEO's personal security last year, a first

Tim Cook's 2014 pay package dwarfed by new hire Ahrendts'

Apple CEO Tim Cook's total 2014 compensation of $9.2 million, while more than double his pay package the year before, was dwarfed by the $73.4 million awarded to one of his subordinates, retail chief Angela Ahrendts, regulatory filings revealed yesterday.In a preliminary proxy statement filed Thursday with the U.S. Securities and Exchange Commission (SEC), Apple spelled out Cook's compensation for the period ending Sept. 27, as well as that for four other current executives: Ahrendts; Eddie Cue, who heads Apple's online efforts; CFO Luca Maestri; and Jeffrey Williams, chief of operations.

Cook received $1.7 million in salary, $6.7 million in a bonus, and $774,000 for sundry expenses, including Apple's contribution to his 401(k) plan, company-paid life insurance, $57,000 for vacation time converted to cash and a new entry of $700,000 identified as "security expenses."

That money, Apple said in the proxy statement, was spent to protect Cook, an unusual move by the company. "The company provides home and personal security for Mr. Cook because his personal safety and security are of the utmost importance to the company and its shareholders," Apple stated. "The company considers the security measures to be a reasonable and necessary expense for the benefit of the company."

Part-way through the year, Cook's salary was bumped up to $2 million from $1.4 million, while the others' base was increased to $1 million from $875,000.

For fiscal 2014, as for the year before, Cook and the others received the maximum bonus allowed. According to Apple, the company's net sales and operating income -- both which grew 7% -- exceeded the targets set by the board, triggering the bonuses.

Cue and Williams were awarded bonuses of $3.4 million atop their $948,000 salaries, both appreciably higher than in 2013, while Ahrendts and Maestri received smaller amounts because they entered their positions after the fiscal year began.

Including stock awards handed out in 2014, all four of Cook's underlings were paid more than the CEO.

That was especially true of Ahrendts, the former CEO of luxury retailer Burberry, who joined Apple during 2014. After taking the Burberry CEO spot in mid-2006, Ahrendts led a turn-around of the 157-year-old company, which had suffered from brand over-exposure and a resulting tarnish in the last decades of the 20th century.

Much of Ahrendts' package was in stock, and included $37 million worth of shares to replace the equity she had in Burberry before leaving for Apple, as well as another $33 million in what the proxy statement called "new hire RSUs," for "restricted stock units." It was essentially a signing bonus, but in future stock equity. Apple usually awards major new hires with similar deals.

"The New Hire RSUs were intended to encourage Ms. Ahrendts to join the company and to provide her with a meaningful equity stake in the company," the statement read.

Unusually for Apple, the company also struck a severance agreement with Ahrendts that runs until May 1, 2017, her third-year anniversary with the Cupertino, Calif. company. If Apple fires Ahrendts -- other than for cause -- or if she resigns "for good reason" she will be paid the remaining amount of her base salary for the time left in the three-year span.

Maestri, who was promoted to CFO in May, was the other new face on the top-five executive panel that Apple defined in the proxy. Maestri's total compensation for 2014 was about $14 million. Cue and Williams each earned approximately $24 million for the year in cash, bonuses and stock grants.

Each Apple executive, excluding Cook, was granted large stock awards in 2014 based on the company's performance during the year: Cue and Williams, for example, were given about $16 million worth each. Apple also changed its every-other-year equity plan for top-tier executives to an annual grant that will kick off later this year.

Those stock grants were at their maximum because of Apple's market performance during 2014. Apple uses a metric called "total shareholder return" (TSR), which is a combination of share price appreciation and dividends paid to shareholders, to measure its performance. For 2014, Apple's TSR was in the top 10% of the S&P 500.

Cook also benefited from Apple's high TSR ranking, since part of the vesting schedule for the massive grant given him in 2011 relies on the metric. Cook was handed the cache of shares when he assumed the chief executive role a month before co-founder Steve Jobs died.

Unlike in 2013, when Cook forfeited about $3.6 million in stock because of the company's weak TSR, all his at-risk shares vested during fiscal 2014. Those 280,000 shares had an on-paper value of $31.5 million at Thursday's closing price.

Altogether, approximately 1.4 million shares from the 2011 award and others vested in 2014 for Cook, with a value at vesting time of $145 million. If Cook held onto those shares, they would be worth $161.3 million at yesterday's market closing.

The proxy statement was issued in preparation for the upcoming stockholders meeting, which will be held March 10 on Apple's campus. Millard Drexler, the CEO of J. Crew and former CEO of The Gap, has said he will retire and not seek re-election to Apple's board of directors. Apple has not named a nominee to replace Drexler, who has been an Apple board member since 1999.

Wednesday, 7 January 2015

Microsoft's device share growth to outpace Apple's through 2016

Gartner's forecast downgrades Apple's OS expected share to 11.3% this year, 11.6% in '16

Microsoft's share of shipped devices will climb slightly this year and pick up some steam in 2016, but Apple's share will grow at a more sluggish pace because of slow-downs in iPhone and iPad, Gartner forecast Monday.

For 2015, Windows' share of the operating systems on all devices -- smartphones, tablets, PCs, ultra-lights and hybrids -- will climb to 14.4%, up from 14% last year, Gartner said in new estimates. It claimed that shipments would increase by less than 7%, to 355 million.

As it did several times last year, Gartner downgraded Windows' numbers for 2015 Monday: Its October 2014 forecast pegged Windows at 14.6% by the end of this year.

Gartner projected Windows' share in 2016 would climb to 15.3% on the back of 396.3 million devices shipped, a year-over-year increase of almost 11%, the largest boost since 2013, when PC sales began a prolonged contraction.

Microsoft wasn't the only OS maker whose forecast worsened in Gartner's latest estimate. Apple will also grow its share at a slower tempo than anticipated by several predictions of 2014.

Apple finished 2014 with an operating system share of 11% by virtue of about 262.6 million devices shipped, said Gartner, and should see its slice of the OS pie grow to 11.3% in 2015. That's less than the 11.6% pegged in the October forecast.

The Cupertino, Calif. company's share will reach that 11.6% -- but now not until the end of 2016, Gartner said today.

Those numbers were significantly under the aggressive estimate Gartner touted a year ago; in January 2014, it predicted Apple's share would reach 13.9% in 2014 and a whopping 15.9% in 2016, hot on the heels of Windows.

They also represented year-over-year increases in devices shipped of 6% for this year and 7% for the next, the numbers in marked contrast to the double-digit growth Apple experienced in 2013 and 2014.

What happened to make Gartner change its prognostication tune?
Its analysts cited Apple's two largest-volume lines, the iPad and iPhone, for their change of heart, pointing -- like many other analysts have in 2014 -- to a longer-than-anticipated refresh cycle for Apple's tablet and the belief that Apple will find it tougher showing iPhone growth in the future as it runs low of new markets and has a difficult time topping the iPhone 6 line.

"The challenge for the next iPhone to find significant growth becomes greater [in 2015 and 2016]," Ranjit Atwal, a Gartner analyst, said in a statement.

Meanwhile, Gartner's forecast for Android got more bullish than ever on Monday. By the end of 2015, Android will have captured 58.9% of the device share -- up from an October 2014 forecast of 57.4% and a January 2014 bet of just 47.8% -- and will grow even larger in 2016, accounting for 62.9% of all smartphones and tablets in two years.


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Thursday, 16 May 2013

Why aren't Microsoft's competitors joining in on the Windows 8 jokes?

As bloggers and analysts have shown, Windows 8 is pretty easy to make fun of. But Microsoft's competitors aren't putting out any "I'm a Mac" ads this time around.

Motley Fool made a great point late last week: Where are the Windows 8 attack ads? They have their suspicions, and I have mine.

Windows Vista was a stinker and everyone knew it, and along came the "I'm a Mac" ads. These ads were devastating in some ways, but as other, cooler heads noted, they also backfired. "PC" came off as a sympathetic character (played so brilliantly by John Hodgman) while "Mac" came off as a dislikable prick.

The ads disappeared in 2009 when Windows 7 hit and all of Apple's arguments were shot down in flames. By that point, there had been rumors of the end of the ads anyway because "Mac" (played by actor Justin Long) had become more of a liability than anything else.

So Fool contributor Rick Munarriz was right to wonder aloud about the lack of attack ads. If anything, Microsoft is on the offense with absolute comedy gold, the wedding-turned-riot as Apple and Samsung fanatics get into a brawl. I don't know how many Lumias that commercial will sell, but it is genius in its own right.

So where are the attacks? Google, Samsung and Apple should be all over this; instead, they are MIA. Windows 8 is being kicked while its down by an entire soccer team, except the team is almost entirely the press and a few analysts.

For starters, Apple can't say too much because its MacBook sales are down along with PC sales. So it's rather difficult to blame Windows 8 for MacBook sales. Second, "I'm a Mac" wouldn't work anyway, because those ads backfired to begin with.

Google has been strangely quiet, even as Microsoft pounds on it from multiple fronts. There's the Scroogled ads, the Bing It On ads, and now a new ad campaign lambasting Google Docs.

Munarriz didn't speculate as to why, but I will.

In the case of Google, the ads aren't working. Google's lead in search remains untouchable and Bing is settling for scraps. Samsung isn't ready to go to war with Microsoft, although it has taken a jab. Thus far, that's as much as they will do, and that's good.

As for Apple, I suspect it may have written off Microsoft, and perhaps the PC business. The "I'm a Mac" ads were in the pre-iPad days. Tablets have changed things forever, now that Apple has validated the concept.

The Mac is 15% of Apple's revenue. I don't think Apple will ever abandon the Mac, but it could likely fade into the same secondary status as the Mac Classic with the click wheel and Apple TV. So long as it pays for itself, Apple will keep it, but the Mac won't be its emphasis, perhaps ever. It has a solid niche, enjoys great success within the creative community, and perhaps that's all Apple wants.

But beware declarations of a technology's death. The mainframe has been declared dead more often than Kenny from "South Park," and IBM still makes a nice chunk of income from them. It may not be a lot, but it’s still relevant.

People may be looking to ditch PCs for tablets now, but we'll see how it goes. I would not be surprised at all if there is a bit of a backlash against tablets in about two or three years when the batteries start dying and people are left high and dry. Those people will remember how they could pop in a new battery on their laptop and they won't be amused at the inaccessibility of a tablet.

All I can say is if Apple or anyone else is ignoring the obvious vulnerability of Windows 8 because they think Microsoft has become irrelevant, they are going to be very sorry when Microsoft gets back up.

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