Apple chief executive Tim Cook gets $750m payout • Hacker News Board

Re: Apple chief executive Tim Cook gets $750m payout

#351

Post by whack » Sat, Aug 28, 2021, 5:40 PM UTC

k__ wrote: post #48

whack wrote: post #35

> In 2015, Mr Cook said he would give away his entire fortune before he dies, and is known to have donated tens of millions of dollars to charity. I'm normally a proponent of reducing income inequality. But this has got me thinking. Is the world actively better off when billionaires like Cook/Gates/Buffett make a ton of money. Consider the alternative: someone in the 75th percentile of USA income gets a fat raise. Mo…

"If every person used their resources for the best of society, the world would be a better place!" Sure thing. The problem is, many of those people also burn money for yachts and spaceships. Plus, to me all this charity stuff seems like a buyout. Gates basically made the world a worse place, before he started to make it better.

> The problem is, many of those people also burn money for yachts and spaceships.

Sure, but upper-middle-class people also burn money on upscale housing/food/travel etc. The main difference is that billionaires who've signed the giving pledge give a much larger fraction of their income and wealth to causes that help the needy.

Also, it seems odd to lump together spaceships with yachts. When anti-intellectuals attack government funding for NASA, we're the first to defend NASA and all the beneficial progress that comes out of funding cutting edge engineering projects. It's disingenuous to then attack people like Bezos when they do the same thing with their own money.

> Plus, to me all this charity stuff seems like a buyout. Gates basically made the world a worse place, before he started to make it better.

Maybe. I'm certainly not saying that billionaires should be given tax breaks because of their virtuous character. Just pointing out that the needy might ironically be best served by a billionaire tax cut.

Re: Apple chief executive Tim Cook gets $750m payout

#352

Post by mFixman » Sun, Aug 29, 2021, 12:15 AM UTC

Andrew_nenakhov wrote: post #349

mFixman wrote: post #241

Earlier quoted context omitted.

Is it possible to have a debate about CEO payout without the dumb comparisons with the Soviet Union? Imperial Russia was an absolutist autocracy in theory for most of its history and in practice for all of it. Does being against despotism mean that I have to give a couple rooms from the property I don't own?

No, because when you appeal to how unjust it is for CEO to be paid much more than workers from a factory, you are repeating the key piece of Bolshevik propaganda.

The necessity of separation between of church and state was also a key piece of Bolshevik propaganda.

Is it okay to say that it's unjust that a countries must be governed an absolute autocrat appointed by God?

Re: Apple chief executive Tim Cook gets $750m payout

#353

Post by webinvest » Mon, Aug 30, 2021, 1:15 AM UTC

code_duck wrote: post #345

webinvest wrote: post #158

Earlier quoted context omitted.

The shareholders decided that providing a share incentive for raising the share price higher than other company shares was a great way to align the interest between the shareholders (who own the company) and the CEO. It’s as simple as that.

Why does Tim Cook need an incentive? It seems like he's plenty motivated already and there's very little chance he might leave for a different position.

Because otherwise he might decide that Apple’s share price doesn’t matter to him and then Apple shareholders would be sad or mad when it doesn’t go up. Aligning interests is a best way to get the outcome you want from any person.

Berkshire Hathaway owns a massive amount of Apple and they help appoint/vote members to Apple’s Board of Directors who influence the CEO. Warren Buffett is likely a very happy man with the way Apple performed and I doubt he is concerned about another man becoming super wealthy as long as they become wealthy together <3. I’m sure that’s the whole point.

Re: Apple chief executive Tim Cook gets $750m payout

#354

Post by webinvest » Mon, Aug 30, 2021, 1:27 AM UTC

bzbarsky wrote: post #300

webinvest wrote: post #150

Earlier quoted context omitted.

If it’s mostly long term capital gains, he’s in the 20% LTCG tax bracket.

23.8%, because he would surely have to pay NIIT as well, right? But also, that's just federal taxes. California adds 13.3% on top of that (for any income over $1 million, which is most of the income here). But also, this is a stock grant, which generally get taxed as ordinary income, so I would expect 37% federal, 2.35% medicare, 13.3% California tax, adding up to 52.65% in taxes.

I’d bet money that Apple’s or Cook’s could afford an accountant that is smart enough to structure the deal so that it would be all long term capital gains instead of all ordinary income. Just say that he received the shares a year ago or when he started but those shares weren’t vested until now. Then it would be 23.8% federal instead of 37% federal… Although our government is broke and needs that extra tax revenue.

Re: Apple chief executive Tim Cook gets $750m payout

#355

Post by code_duck » Mon, Aug 30, 2021, 3:15 AM UTC

webinvest wrote: post #353

code_duck wrote: post #345

Earlier quoted context omitted.

Why does Tim Cook need an incentive? It seems like he's plenty motivated already and there's very little chance he might leave for a different position.

Because otherwise he might decide that Apple’s share price doesn’t matter to him and then Apple shareholders would be sad or mad when it doesn’t go up. Aligning interests is a best way to get the outcome you want from any person. Berkshire Hathaway owns a massive amount of Apple and they help appoint/vote members to Apple’s Board of Directors who influence the CEO. Warren Buffett is likely a very happy man with the w…

This is a reward for past performance, not an incentive for future performance.

I’m sure that Tim Cook was already extremely wealthy prior to this, to an extent that would exceed any capability to spend it on himself.

So now that he has an additional 750 million dollars, what is his incentive to continue performing?

He needs another 750 million dollars? For what? Is he supposed to be excited that he might receive some other ridiculous sum of money for which he has no realistic use?

Re: Apple chief executive Tim Cook gets $750m payout

#356

Post by unethical_ban » Mon, Aug 30, 2021, 2:42 PM UTC

MikeLumos wrote: post #240

avianlyric wrote: post #210

Earlier quoted context omitted.

I don’t ones a ability to make money is even vaguely correlated with once ability to spend well for the benefit of society. Hell the whole reason why democracy is thing is because monarchies of yesteryear have proven quite decisively that the ability to raise capital and spend well for society are not even remotely linked. We need to consider very carefully as a society what the impact of the billionaire class has on…

The alternative to a billionaire deciding how to spend the money they have earned is a politician deciding to spend the money they didn't earn. I trust a person who has generated billions of dollars worth of value over a buerocrat who won a popularity contest. Besides, I don't think it should matter whether or not these people spend their money optimally. They've made this money, it's theirs. Don't take other people'…

See, you keep saying "value they created" rather than "value they extracted from others in society".

Re: Apple chief executive Tim Cook gets $750m payout

#357

Post by webinvest » Tue, Aug 31, 2021, 2:09 AM UTC

code_duck wrote: post #355

webinvest wrote: post #353

Earlier quoted context omitted.

Because otherwise he might decide that Apple’s share price doesn’t matter to him and then Apple shareholders would be sad or mad when it doesn’t go up. Aligning interests is a best way to get the outcome you want from any person. Berkshire Hathaway owns a massive amount of Apple and they help appoint/vote members to Apple’s Board of Directors who influence the CEO. Warren Buffett is likely a very happy man with the w…

This is a reward for past performance, not an incentive for future performance. I’m sure that Tim Cook was already extremely wealthy prior to this, to an extent that would exceed any capability to spend it on himself. So now that he has an additional 750 million dollars, what is his incentive to continue performing? He needs another 750 million dollars? For what? Is he supposed to be excited that he might receive som…

No, this share plan was decided years ago around the time Steve Jobs died. Apple’s outlook wasn’t so clear then.

Re: Apple chief executive Tim Cook gets $750m payout

#358

Post by code_duck » Thu, Sep 02, 2021, 1:29 PM UTC

webinvest wrote: post #357

code_duck wrote: post #355

Earlier quoted context omitted.

This is a reward for past performance, not an incentive for future performance. I’m sure that Tim Cook was already extremely wealthy prior to this, to an extent that would exceed any capability to spend it on himself. So now that he has an additional 750 million dollars, what is his incentive to continue performing? He needs another 750 million dollars? For what? Is he supposed to be excited that he might receive som…

No, this share plan was decided years ago around the time Steve Jobs died. Apple’s outlook wasn’t so clear then.

What do you mean by 'no'? That agrees with the statement that this is a reward for past performance and I don't see how that is relevant to my other statements.

Re: Apple chief executive Tim Cook gets $750m payout

#359

Post by webinvest » Sat, Sep 04, 2021, 10:28 PM UTC

code_duck wrote: post #358

webinvest wrote: post #357

Earlier quoted context omitted.

No, this share plan was decided years ago around the time Steve Jobs died. Apple’s outlook wasn’t so clear then.

What do you mean by 'no'? That agrees with the statement that this is a reward for past performance and I don't see how that is relevant to my other statements.

> “This is a reward for past performance, not an incentive for future performance.”

It _was_ an incentive for future performance. The shares for this reward had already been set aside years in advance incase he hit his share price targets —- when they were worth much much less.

Re: Apple chief executive Tim Cook gets $750m payout

#360

Post by bzbarsky » Thu, Sep 09, 2021, 3:48 PM UTC

webinvest wrote: post #354

bzbarsky wrote: post #300

Earlier quoted context omitted.

23.8%, because he would surely have to pay NIIT as well, right? But also, that's just federal taxes. California adds 13.3% on top of that (for any income over $1 million, which is most of the income here). But also, this is a stock grant, which generally get taxed as ordinary income, so I would expect 37% federal, 2.35% medicare, 13.3% California tax, adding up to 52.65% in taxes.

I’d bet money that Apple’s or Cook’s could afford an accountant that is smart enough to structure the deal so that it would be all long term capital gains instead of all ordinary income. Just say that he received the shares a year ago or when he started but those shares weren’t vested until now. Then it would be 23.8% federal instead of 37% federal… Although our government is broke and needs that extra tax revenue.

The legal structures for RSUs are pretty clear, and they are counted as ordinary income when they vest.

The particular shares involved _could_ have used a different legal structure, but that's not my understanding based on the articles I've seen about this.

But even in your hypothetical it would not all be capital gains. It would be ordinary income for the value of the shares at the point of the grant, and capital gains for the appreciation since then.