Apple CEO Tim Cook declines RSU dividends worth over $75M

In the filing, it was reported that Apple's board of directors had decided to give RSU holders the same $2.65 per share quarterly dividends offered to public shareholders, but Cook requested not to take the award that would be worth more than $75 million.

From the 8-K filing:

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.

Because restricted stocks vest in intervals, an executive or employee is more apt to stay with a company and perform well to ensure the highest payout when the units convert to shares.

After being named CEO in 2011, Cook received a one million RSU bonus which at the time was worth an estimated $383 million. The chief executive's RSUs are on a five and ten year vesting schedule, meaning that half of his restricted units vest in five years with the remainder to be converted after ten years.

Earlier this month, Cook sold 37,500 RSUs that were awarded to him during his tenure as interim CEO two years ago, netting about $11.1 million in the process.