Why there are no Apple billionaires

From Bloomberg’s Apple Is the Richest Company, So Where Are the Billionaires?

According to the Bloomberg Pay Index, which ranks the best-paid senior managers at public U.S. companies, Apple’s leaders are downright bargains. The cost of executive compensation as a fraction of economic profit — defined as after-tax operating profit minus capital costs — was the lowest among the companies whose bosses were the country’s 200 best-paid in the most recent fiscal year.

That has led to relatively small insider holdings, underscoring how few known billionaires the Cupertino, California-based company has spawned since its recovery from the brink of bankruptcy in 1997.

“Apple came back from the dead and that messed up the cap table,” said Gene Munster, a co-founder of Loup Ventures and a long-time Apple watcher. “You didn’t have that very centralized ownership any more.”

That sets it apart from other tech mega-caps, whose founders and occasional employees increasingly dominate the Bloomberg Billionaires Index, which tracks the wealth of the world’s 500 richest people.

They include Amazon.com Inc.’s Jeff Bezos, Alphabet Inc.’s Sergey Brin, Larry Page and Eric Schmidt, Microsoft Corp.’s Bill Gates and Facebook Inc.’s Mark Zuckerberg and Jan Koum. Fortunes associated with these companies account for about 10 percent of the index.

My take: Apple is doomed.

CLARIFICATION: As Bloomberg notes, Apple board member Arthur Levinson made his billions from Genentech, not Apple, and billionaire Laurene Powell inherited her fortune from Steve Jobs, who made it not from Apple but by selling Pixar to Disney.

2 Comments

  1. Ken Cheng said:

    Should be reassuring that Apple isn’t owned, and/or controlled by its billionaire founders, like the other techs.

    My recollection was that Steve received about $800M in Apple shares thru RSUs, net $500M, after paying about $300M in taxes, for something like 10 yrs of service, and only getting paid $1 a year. At Pixar, Steve owned about half the company, so when he sold it for about $7B, he got about $3.4B in Disney shares. Of course, the value of Apple and Pixar/Disney, have gone up considerably since those days, so Laurene’s fortune is quite a bit more.

    Cook’s RSUs might eventually be worth more than $1B, since I vaguely recall they were valued at about $350M when issued, and would be worth considerably more today.

    2
    April 13, 2018
  2. Fred Stein said:

    In October 2015, Apple made it possible for all employees, including retail and support staff, to be nominated for RSU (stock grants). Before that they offered employee stock purchase plans (discounted shares) to all employees.

    That’s great news for investors. It’s one more way that Apple advances its core values.

    2
    April 13, 2018

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