One Bad Apple
Tim is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
I recognize that a discussion of Apple (NASDAQ: AAPL) that doesn’t ooze gobs of glowing praise will immediately appear misguided, uninformed, and just plain WRONG. How can a person, any person, not fall madly in love with the world’s greatest company?
Here’s one way: pay your CEO what is likely to end up being about $400 million for a year’s work. That, my friends, goes well beyond being frivolous or even wrong, that’s just disgusting. Oh, I can hear the naysayers already, “but it’s mostly stock options” and they’re right. But there are principles involved here, or a lack thereof, which make that point moot.
Without turning this into a political debate, in my humble opinion the Occupy This, That and the Other folks are fairly worthless. It doesn’t take a rocket scientist to see a vast majority of them don’t have the faintest idea why they’re even in whatever city they happen to be in. “It’s a campout, who brought the S'mores?” With that said, if wiping out corporate greed really is an objective of these people, why in the world haven’t they descended on Cupertino, California like locusts? Nobody, and I mean NOBODY is worth almost $400 million for a year’s work regardless of the appreciation the stock has seen.
There are nearly 930 million shares of Apple stock. CEO Tim Cook’s one-year paycheck would provide each and every one the shareholders with a $0.40 a share dividend, give or take. Every. Single. One. Which would be about $0.40 a share more than any of them are getting now.
It’s great the company is making money hand over fist and will soon take over the world, to the excited glee of Applets everywhere. But shareholders are owners of the company; don’t they deserve something too, beyond an appreciating stock price? This has a nasty smell to it that a higher that stock appreciation won’t get rid of. At least it should.
Memories on The Street can be short, but going back a few years may put some of this into perspective. It wasn’t long ago financial services companies like Goldman Sachs, Merrill Lynch, and those Shearson Lehman guys (remember them?) were passing money around like they couldn’t print it fast enough. Traders were getting 7-digit bonuses, CEOs made enough to buy a decent-sized country, and how did investors react? “Hey, they’re making us money, so who cares?” We all know how that ended.
Is Apple a Lehman? No of course not, they are two entirely different beasts. But greed is greed and as owners of the company, shareholders should be outraged. This type of pay package, and more importantly what it says about the company, flies directly in the face of what made Apple, Apple. They built an almost cult-like following cranking out good, innovative products and branding themselves as the anti-corporate corporation. “We’re all in this together taking on the big, bad Microsofts of the world.” Now this?
Oh, it’s all well and good now, and there are legions of diehards who can’t imagine a world without their Apple. I can hear you seething now; the very idea that anyone could even question the company’s motives or philosophy. But it’s time to take a close look at the business you know and love Applets; because the wind is shifting and something doesn’t smell right.
The investment opinions included are just that, opinions. Tim is not a licensed investment professional, nor has he been for several years. Investing involves risk, as you well know, so consider your decisions wisely.