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Apple VP Johnson Cashes In On $9.6M Stock Profit

First on TMO - Apple VP Johnson Cashes In On $9.6M Stock Profit

by , 7:00 AM EST, November 2nd, 2004

Two days after Apple Computer announced its iPod Photo and U2 iPod, company Senior Vice President Ron Johnson reaped a US$9.6 million dollar profit on stock options last Thursday, as Apple's stock flirted with a new yearly high.

Mr. Johnson bought 300,000 shares of Apple stock on Oct. 28 for $18.59 and sold those same shares for $50.5875, taking home a pre-tax profit of $9,626,250.00, a filing made Monday with the U.S. Securities and Exchange Commission revealed.

Had Mr. Johnson waited 24 hours, his selling price would have been closer to $53.20, which currently remains as Apple's 52-week high set on Oct. 29. As a result, Mr. Johnson lost in the neighborhood of $756,000 in additional profit. Company executives do not buy or sell shares at the same price as regular investors and are often offered more competitive pricing, depending on the compensation plan negotiated when they joined the company.

Mr. Johnson leads the development of Apple’s retail strategy and is responsible for its overall performance and execution. He joined Apple in January 2000 and reports directly to Chief Executive Officer Steve Jobs. Before joining Apple, Mr. Johnson held various management positions at the Target Corporation, most recently as Vice President of Merchandising for Target Stores.


Ron Johnson sold 300,000 in Apple stock, making a $9.6 million profit.

As of late, a multitude of Apple execs have taken advantage of the company's escalated stock price and sold well over a million shares, reaping more than $38 million in profit. As first reported by The Mac Observer on October 22, five Apple executives sold more than 830,000 shares of stock in the company, taking home more than US$29 million in profit in a seven day period.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Guest
Subject: They are called options

He basically exercised his options which he received as part of his payment package. Apple issues Options at the price of the stock when they are issued.

He is required to pay the price of the option on conversion, so basically Apple received 5+ Million dollars for this exercise and has the added benefit that these additional shares are no longer over-hanging the stock but were sold at a high average price.

Close Name:Guest
Subject: Good for Ron!

Based on his division's results, I'd say he earned every penny! Remember when Apple announced their retail plans? Gateway was shutting stores down and the pundits were saying Apple was crazy and the stores would be at best loss leaders that could somehow be rationalized as marketing expense like Sony's showcases. Clearly the stores have been a slam dunk success - you can tell that by looking at the financials or just by walking through one of their always busy extraordinary stores.

Close Name:DawnTreader -   TMO Staff Posts: 15039 Joined: 04 Jan 2002
Subject: Re: They are called options

Quote
Anonymous wrote:
He basically exercised his options which he received as part of his payment package. Apple issues Options at the price of the stock when they are issued.

He is required to pay the price of the option on conversion, so basically Apple received 5+ Million dollars for this exercise and has the added benefit that these additional shares are no longer over-hanging the stock but were sold at a high average price.


Excellent points!

Guest, please register as a member and join the discussion in the Apple Finance Board forum.

Apple picks up a boatlaod of cash, the overhang is reduced as well as the potential hit to earnings when the new FASB rules take effect which will require the expensing of options.

It's good to see Apple employees being rewarded for the company's performance. So far this year shareholders have benefited by an increase in the value of their holding by more than $10 billion.

Employees are realizing a very small portion of that gain (the benenfit to the company's owners for their hard work) and the company's coffers continue to fill with cash.

As interest rates rise the return on Apple's cash position will contribute even more to the company's earnings.

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