It’s hard to believe it’s been almost a decade since Tim Cook was officially appointed CEO of Apple. For those who don’t remember that far back, Tim had actually served as temporary CEO a few times when Steve Jobs took time off for medical treatment. He was officially confirmed as permanent CEO in 2011. He has been with the company since 1998. Prior to becoming CEO, he was Senior Vice President of Worldwide Operations at Apple.
Many people were skeptical of Tim and Apple in general without Steve Jobs (who died in October 2011, three months after Tim was appointed CEO). Most of the outside world had never heard of Tim Cook. We knew Steve Jobs. He was the genius who saved Apple from the brink of bankruptcy. It was the genius that drove the company from innovation to innovation. From iTunes to iPod to iPhone to iPad. Under the reign of Jobs, Apple reached a market capitalization of $ 350 billion.
So how did Tim end up playing?
Below is a graph of Apple’s stock performance. I added a red arrow to indicate the day Tim became CEO:
And while you are looking at the table above, check the number shown next to “Mkt cap” at the bottom left. Do you see “MKT cap T $ 1.93“?
This means that Apple’s current market cap is $ 1.93 trillion.
To reiterate: At the top of Steve Jobs, Apple’s maximum market cap was $ 350 billion.
I guess you could say that Tim Cook played pretty, pretty, pretty, pretty well!
How has Tim Cook’s net worth evolved during this time? Also, pretty, pretty, pretty, pretty good!
Tim Cook becomes billionaire
The day Tim was named Apple’s permanent CEO, he received a hugely lucrative compensation. The most lucrative aspect of this program is the capital grants. These grants were acquired in annual installments over 9 years (we are currently in the ninth year). Much of these grants are performance based. It only receives this share in years when Apple’s stock exceeds 2/3 of the S&P 500 companies. This month is the last month of the nine-year payout plan.
Tim has taken every step.
As of this writing, Tim is Apple’s second largest individual shareholder. Cook owns 847,969 fully vested shares of Apple. He probably received about twice as many actual shares along the way because he was forced to sell shares to cover taxes at the time of each grant. At the time of this writing, those 850,000 or so shares were worth $ 380 million.
Tim will receive his ninth and largest grant later this month. This grant will provide him with 560,000 new shares, valued at $ 250 million to $ 450 per share. After covering taxes, he will have $ 125 million.
In other words, on September 1, Tim will own approximately 1.130 million fully vested Apple shares (850,000 + 280,000). This is after the taxes have already been paid. At the current price per share of $ 450, those 1.130 million shares are worth $ 510 million.
According to Bloomberg’s analysis, Tim has earned at least $ 650 million in other compensation from his salary, bonuses, and previous sales since joining Apple in 1998.
When you add all that up, it’s very safe to assume that Tim Cook’s net worth will officially transition to billionaire status by the time the 560,000-share award takes place this month.
Not only is Tim close to joining the Three-Point Billionaire Club, but he will also be joining a very exclusive club of people who have become billionaires as employees, not founders, of a company. Think about this accomplishment. 99.999% of other billionaires in the world are either founders of companies or heirs of people who started companies. Starting out as a former regular employee (in 1998 in Tim’s case) and achieving a net worth of $ 1,000,000,000 is nothing short of extraordinary.
Off the top of my head, Jamie Dimon of JP Morgan and Lloyd Blankfein of Goldman Sachs are the only other employed billionaires I can think of. There may be others, but this is an extremely small club.