A rosy forecast for iPhone sales that helped push Apple’s stock to a record high edged chief executive officer Tim Cook closer to reaching the top threshold for his 2017 performance award.
A surge in Apple shares briefly boosted the S&P 500 and took the Dow Jones Industrial Average past 22,000 for the first time.
The stock rose as much as 6.4% at one stage, to $159.65 a share, boosting the market capitalisation of the world’s most valuable company by about $50bn (€42.3bn) to $832bn (€704bn).
Mr Cook, 56, will collect 280,000 shares later this month if total shareholder return over three years beats at least two-thirds of the companies in the S&P 500.
If Apple falls in the middle third of index members he gets half that amount, and none if it lands in the bottom third.
Before it posted its latest earnings report, 140,000 shares were hanging in the balance. Then the firm posted strong third-quarter results and boosted its revenue outlook for the fiscal year, sending the shares to new heights.
The daily advance puts Mr Cook firmly within reach of his full performance award, currently worth $44m.
That’s good news for the charities that will eventually receive the bulk of Mr Cook’s wealth. The CEO said in 2015 he plans to donate most of his fortune — after paying for his nephew’s college tuition.
There’s no guarantee Apple’s total shareholder return will remain in the top third when the performance period ends. The final calculation will be based on the average prices in the 20 trading days before the start and end of the three-year performance period.
When he took over as CEO in 2011, Mr Cook received a big stock award that was set to vest in two phases over a decade. In 2013, at his request, the board’s compensation committee tied a third of those shares to the company’s relative stock performance versus the S&P 500. The shares pay out annually.
“The Appleverse is expanding with all segments growing,” UBS analyst Steven Milunovich said. At least eight brokerages raised their price targets on the stock, with Barclays making the most bullish move by raising its price target by $23 to $146.
The median price target on the stock is $165. Apple shares had surged on its better-than-expected third-quarter results and on indications that its upcoming 10th-anniversary iPhone lineup was on schedule.
Apple is widely tipped to adopt higher-resolution OLED displays for the latest iPhone. Sales of iPad made a surprise comeback in the quarter and were up 15% from a year earlier. The company also hit a milestone of 1.2 billion iPhones sold.
Bloomberg and Reuters
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