VP of Hardware Dan Riccio sells $11M in AAPL
Friday, November 16, 2012 @ 11:02pm
| The Vice President of Hardware Engineering for Apple, Dan Riccio, has sold over 20,000 shares of Apple stock he had accumulated over the years, netting the executive nearly $11 million in total, though around $525,000 of it has been set aside as a charitable donation. Including that gift, the total value of the 19,726 shares sold is approximately $10.73 million, minus any applicable taxes. Riccio replaced the formerly-retiring Bob Mansfield as head of hardware engineering, with Mansfield returning to the company to head up a new "Technologies" group.
While the total amount of AAPL Riccio held or is still holding is not known, he still has a total of 75,000 stock options which will vest over several years, allowing him to buy stock at a discounted price and hold or sell them at his discretion. At the time they were awarded, the stock options were worth a total of $50 million, but do not vest all at once.
The first third of the award does not become eligible for Riccio until over a year from now, in December 2013, and the remaining thirds vest in April 2015 and August 2016, respectively. The total value of the options may increase or decrease with the company and the market's fortunes -- the value has already declined almost 25 percent from when they were originally granted.
The 1,000 shares of stock Riccio donated to charity are not necessarily sold, but their current value is counted for tax reasons. The recipient charity was not named in the SEC filing.
Why Riccio -- along with several other Apple executives -- have sold off modest amounts of stock in the company has not been made public, but is likely to do with avoidance of possible increases in capital gains taxes with the new Congress. Money made through stock transactions -- capital gains -- have been very lightly taxed for decades (ever since they were no longer counted as straightforward income), and most analysts foresee an increase on the rate coming as part of a deal to avoid the so-called "fiscal cliff" and to put a dent in the US' now-crippling deficit, which has been an ongoing problem over at least the past decade.
Currently, the rate of tax on capital gains is 15 percent, regardless of the seller's income tax rate; in the 70s, the rate was 35 percent. Prior to 1950, capital gains were treated as income and taxed at a rate based on the total of the individual's income. While few expect a serious rise in capital gains taxes, even a 10 percent change would result in significant revenue for the government on large-volume stock trading as has become more common today.