Anybody who sees my frequent Twitter exchanges with Jon Fortt of CNBC knows how much I respect the guy. There's no better tech reporter in all of tech. And he's a good guy. I can vouch for this on the basis of our limited public and personal conversations.
That said, he's missing the larger -- and more important -- point on why the company's decision to tie the size (hence, value) of upper management's stock option packages to S&P 500 performance is so tragic. This is not only a rebuke of Steve Jobs and the Apple way -- the very essence of what made Apple the world's greatest company -- it's a perverse validation of Wall Street and the stock market. As if Wall Street should play any role whatsoever in determining how much anybody from the CEO to the cleaning crew at Apple makes.
@Rocco_TheStreet Have you forgotten Steve's own history with exec compensation?— Jon Fortt (@jonfortt) June 22, 2013
@Rocco_TheStreet He backdated stock options, so ... absolutely— Jon Fortt (@jonfortt) June 22, 2013
@Rocco_TheStreet That's not a stock market index, but it's in the ballpark— Jon Fortt (@jonfortt) June 22, 2013I don't agree that it's in the ballpark. In fact, it's not even in the same league. Do a Google search for "Steve Jobs backdated options" and, after a small bit of memory refreshing, I think you'll agree. But, we're not playing Pepper here. Fortt still has a point. There's no question it sounds so great to hear the mantra shouted: Tim Cook wants his pay tied to his performance!. Here he is playing the role of shareholder's best friend again. First, it's an easy move to make when you're already rich beyond comprehension. The most recent take by Cook and his colleagues hits in the multi millions, according to an SEC document tied to the options restructuring. Of course, there's nothing wrong with that. It's how these guys get paid. It's perfectly explainable. On the up and up. But, again, you're putting compensation at risk that's little more than icing on an already badass cake. Second, don't buy the superficiality of the argument that this is good for shareholders because Apple brass now has real incentive to see the stock price rise. Tied to the first point, this is not real, true incentive. This is akin to the author Barbara Ehrenreich seeing how it feels to work minimum wage jobs in Nickel and Dimed: On (Not) Getting By in America or an activist "experiencing" homelessness for a few nights. When you have security (a credit card for emergencies, money in the bank, fortune), you really cannot experience being poor or the type of scared stiff incentive that drives people to snatch victory from the jaws of defeat. It's just not possible. It's not even the same as somebody making $100,000 a year being incentivized up to $150,000 or $200,000. It's all lip service. Something we're seeing more and more of from Apple under Cook's leadership. It's astonishing that anybody at Apple would go along with the notion of freaking Wall Street dictating how much somebody gets paid. Isn't the going argument among people who request we lay off the Apple bearishness that the market "misprices" the value of AAPL stock? You know ... how can Amazon.com (AMZN) "lose money" or have a P/E of 3,000 and a stock price of $270, while investors "undervalue" AAPL at a P/E of 10? But, yeah, it's a brilliant and ballsy move by Cook and the Board to, yet again, give the nod to external and irrational forces such as the stock market. These guys are recklessly and multi-handedly desecrating Steve Jobs's legacy. This is just another example of Apple losing its way, operating like every other company. Come up with something novel. Think different. Apple has stooped to the point where it has to "reward" shareholders with stuff right out of the MBA textbook. Dividends. Buybacks. Zero imagination. If Tim Cook really wants to tie his pay to performance, why doesn't he use unit sales of Apple's next big piece of hardware as the benchmark, not a market index that's coming off of one of history's biggest bull runs? Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.
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