When did Scott Forstall know he was in trouble at Apple?
His share sales may provide a clue.
In late April, he sold 95 per cent of his holdings of Apple shares, clearing $38 million after taxes.
In June, he took the stage at Apple’s Worldwide Developers Conference in San Francisco to unveil Apple’s new Maps app for the iPhone. It demoed great. In the real world, it proved a disaster. Forstall reportedly refused to sign a letter apologizing to customers. CEO Tim Cook signed it instead, and Forstall was shown the door.
He’s being shown the door slowly, though, and getting paid well along the way.
In a letter to Apple employees, Cook thanked Forstall for his “many contributions” to Apple. Forstall is serving as an advisor to Cook until he leaves the company “next year”—no date specified.
In November 2011, Forstall got a grant of 150,000 shares in the form of restricted stock units, vesting in two tranches. Half the shares vest on June 21, 2013.
At current prices, those shares are worth about $45 million before taxes.
The second half of his 2011 bonus doesn’t vest until 2016. He has another 100,000-share grant which doesn’t vest until 2014. Those total $105 million at today’s share prices. We assume he’s losing those shares, though it’s possible Apple might accelerate his vesting or otherwise provide some partial compensation.
Why would Apple do that? It could be part of a non-compete deal. Even if it doesn’t want Forstall, it doesn’t want to see him run off to a competitor.
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