Simon Hayward from Cirrus writes for People Management
Apple CEO Tim Cook has made a bold and somewhat surprising decision by opting to forgo the $75m (£48m) dividend payments he could have earned on his 1 million shares in the company.
When Cook first took over as Apple CEO last year, he was thought of as a very safe pair of hands. Although much admired for his unwavering focus on results, he was considered a bit dull in relation to his predecessor Steve Jobs. But as time goes by, Cook is proving to be as much a master of employee and investor relations as he is of operational efficiency. He is emerging as a people-focused leader, keen to share leadership responsibility and engage employees across the organisation. Steve Jobs’ Apple combined innovation and perfectionism. We are beginning to see signs that Cook has ambitions to change the company’s behaviour.
In April, Apple took over a hotel complex for its first ultra-secretive ‘Top 100’ meeting since Cook took over. Selected leaders were invited to come along by the CEO based on how valuable their contributions might be, rather than a strict adherence to organisational hierarchy.
According to various insider reports, Jobs had the ability to instil fear in others at these meetings. At Cook’s first ‘Top 100’ event however, the spirit was more relaxed and more enjoyable, with the CEO’s mood described as ‘jovial’. Delegates report feeling energised and one veteran executive claimed to have been ‘blown away’. It would appear that Cook is a positive role model for a more collaborative, less hierarchical style of working.
Other Apple executives are also communicating openly and engaging very directly with employees across the organisation. Apple recently appointed John Browett as senior vice president of retail. Browett, formerly CEO of Dixons Retail in the UK, made headlines over the weekend when it was reported that he is to receive a $56m (£36m) ‘golden hello’ in share payments over five years. However, it is also worth mentioning that Browett became instantly popular with Apple store employees when one of his first moves was to bring salary rises forward by three months from September to June. In an open letter to introduce himself, he said that one of his top priorities for the coming months was to meet many of the store employees around the world who “make the difference in creating the best retail experience”.
The Securities and Exchange Commission filing does not indicate the reason for Cook’s decision to forgo dividend payments. However, sources close to the CEO say he wanted to ‘set an example’ against a backdrop of investor revolts over boardroom pay. Relinquishing such a huge amount of money may not be such a great sacrifice when you consider Cook is reportedly sitting on deferred stock worth more than $500m (£320m), but it is still a strong statement from a CEO who is clearly aiming to change the Apple culture.
As well as communicating more openly with employees, Cook is also communicating more directly with investors, which many appreciate very much. By building these connections and engaging in more open dialogue, Cook is demonstrating a willingness to share leadership responsibility, to learn from others, and to make himself more accountable. He remains a bit of an enigma, but the signs are that he is quite a values-led leader. His decision to forgo significant dividend payments is both a strong signal and a smart move that could further engage employees, shareholders and customers with a new Apple culture.
Click here to read Simon’s blog post on the People Management website.