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Apple CEO Tim Cook, the highest-paid CEO in corporate America, will forgo about $75 million in dividend equivalent payments on stock that he is scheduled to receive over time, the technology giant said in a regulatory filing.
Apple said in March that it plans to start paying cash dividends of $2.65 per share on a quarterly basis some time during the fourth quarter of its fiscal year. In its regulatory filing, the company said the compensation committee of its board has approved amendments to unvested restricted stock unit awards granted to employees. Under the amendments, when Apple pays a cash dividend on its common stock, each award will be credited with an equal amount.
“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,” Apple said.
At Cook’s request, none of his restricted stock units will earn him such dividend payments, though, according to the regulatory filing. “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 forgo approximately $75 million in dividend equivalent value,” the filing said.
Cook earned $378 million in compensation last year, putting him at the top of the CEO pay ranking. But he only received a base salary of $900,000. The vast majority of his compensation came from restricted stock grants.
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