Burberry Group Plc CEO Angela Ahrendts At The London Stock Exchange

SEC filings show that Angela Ahrendts had half of her first allocation of AAPL stock withheld on 1st June – the day it vested, and just one month after joining the company – reports ComputerWorld.

According to a filing with the U.S. Securities and Exchange Commission (SEC), Ahrendts received 16,264 shares in Apple stock when it vested June 1 […]

Ahrendts sold 8,331 shares that same day for a pre-tax total of $5,273,523.

The full value of her stock, which is likely to vest (become eligible for sale) over several years, will add up to $78.5M at the current share price. Her total compensation in her final year as CEO of Burberry was $4.4M – though she did also get a clothing allowance of $42,000 and a car allowance of $30,000 (only at a fashion company could you get more to spend on clothes than a car …).

Selling half your stock at the very first opportunity doesn’t seem to send the best of signals a month into the role, but I guess she needs to buy a house out in the Valley and those aren’t exactly cheap right now.

The withholding of the shares came just over a week before a 7-to-1 stock split, on Monday. The stock split should make AAPL shares more attractive to smaller investors, a shift that could make the share price more volatile.

Via Fortune

Update: These shares were withheld for tax purposes by Apple not sold on the open market

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12 Responses to “Apple’s retail head Angela Ahrendts has stock withheld for tax purposes (Updated)”

  1. eswinson says:

    The stock is probably at close to the peak it’s going to be for a few months. Maybe she needed the cash or plans to buy it back at a lower price after the split. Either way I don’t think it has anything to do with her faith in the company.

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    • eswinson says:

      I got burned once in an all stock deal in the early 2000s by holding past several vesting windows while the value ratcheted up. Then one day in September some rascally terrorists put an end to that run up. By the next next window where I could sell my shares, they were over $50 underwater never to recover. My regret was not having faith in the company but rather not taking just a little cash off the table when I could have.

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  2. fredhstein says:

    Net of taxes, she gets a bit over $3M, which buys an OK house in Silicon Valley these days.

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  3. Its likely an automatic sale to cover tax withholding on her grant. Typical withholding is Federal at 25%, California at 10.1%, 1.5% for Medicare, and city/county tax (if any). Plus, she probably has $117K worth of Social Security tax withheld too as she’s been paid out of the UK YTD. So about half is gone before she gets the shares. Thanks tax man!

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    • Tim Jr. says:

      Exactly.. she doesn’t get those stock options free.. I’d sell off some to cover as well.. And while at it get some spending money. Might as well..

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  4. rlowhit says:

    Lifestyle overhead from the fashion industry vary, coming from Burberry she may not have immediately acclimated to the Silicon Valley lifestyle yet.

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  5. Mav says:

    Nope.

    (Registrant is Apple Inc.)

    http://investor.apple.com/secfiling.cfm?filingID=1181431-14-22493&CIK=320193

    Common Stock (2) 6/1/2014 F 8331 D $633.00 7933 D

    ( 2) Shares withheld by Registrant to satisfy the minimum statutory tax withholding requirements on vesting of restricted stock units. No shares were sold.

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  6. Guys, guys ~ Angela needed a new wardrobe for her Apple gig and the $3 million after tax should just about cover it.

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  7. ron837192 says:

    Ignoring the message that it sends, selling 100% of the RSU’s when they vest is definitely the right thing to do as soon as they vest. Unlike ISO’s which are usually highly leveraged and have no tax impact until they are exercised, the RSU’s have no leverage, and have an immediate tax impact. Even if Apple did not automatically sell any of them, Angela would still be taxed on them this tax year (probably resulting in a $4 million tax bill or so).

    Given that there is no leverage and no tax advantage to holding them, and given that an employees finances are already so tied up in the company (salary / future unvested ISO’s and RSU’s), the smartest thing she could do would be to sell them and diversify her holdings.

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  8. Who cares? She could be smoking it for all I care. As long as she does the job she was hired to do, who gives a crap what she does with her money? How is this anyone’s business? Can you imagine what it would be like if your finances were splattered all over the internet? How awkward would that be for you?

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