Apple in its 8-K form filing announced that it would be paying out dividends to employees with restricted stock units although the company originally announced plans to pay out dividend and institute a $45 million stock buyback program back in March. Restricted stock units are shares awarded to employees that are not allowed to be sold before a certain time has been reached.
The Committee determined these amendments were appropriate in light of the Company’s announcement on March 19, 2012 that it intends to commence paying ordinary cash dividends of $2.65 per share to its shareholders on a quarterly basis sometime during the fourth quarter of its 2012 fiscal year. As restricted stock units are not outstanding shares of common stock and thus would not otherwise be entitled to participate in such dividends, the crediting of dividend equivalents is intended to preserve the equity-based incentives intended by the Company when the awards were granted and to treat the award holders consistently with shareholders.
At Mr. Cook’s request, none of his restricted stock units will participate in dividend equivalents. Assuming a quarterly dividend of $2.65 per share over the vesting periods of his 1.125 million outstanding restricted stock units, Mr. Cook will forego approximately $75 million in dividend equivalent value.
This means that the payout will be to the tune of $2.65 per share to employees with RSUs, bringing the rise a hefty one, mainly for executives who are having a large piece of shares with them.