Apple’s dividend heralds ‘changing of the guard’
SAN FRANCISCO (AP) – What would Steve have done?
It’s a question that Apple CEO Tim Cook can’t escape. From the naming of the new ipad to his choice of clothing at public events, company-watchers parse Cook’s every move, looking for differences between him and the company’s revered founder Steve Jobs.
But Cook seems determined to stamp his own legacy on the world’s most valuable company. In the biggest break from Jobs’ philosophy since Cook succeeded him as CEO seven months ago, Apple is dipping into its nearly $100 billion cash stash to start paying a quarterly dividend of $2.65 per share to its stockholders.
The commitment announced Monday draws a clear line of demarcation between Cook and Jobs.
“This is indicative of the changing of the guard at Apple,” says ISI Group analyst Brian Marshall. “I don’t think this would have happened under Steve Jobs. This clearly shows Tim Cook is his own man.”
Jobs hoarded cash like a man afraid of running out of it. Plagued by memories of Apple’s flirtation with bankruptcy in the late 1990s, he steadfastly resisted calls for the company to pay a dividend. Jobs never wanted Apple to be so destitute that it would need financial help, as it did in 1997 when he negotiated a $150 million infusion from rival Microsoft Corp.
With Cook in charge, Apple is now ready to herald a new era and dole out about $10 billion in dividends each year. It’s an amount that Apple can easily afford, given the size of its current bank account and the billions more pouring in amid feverish demand for its iphones, ipads and ipods. Analysts and investors viewed the dividend as a sign of Cook’s willingness to listen to shareholders.
“The new management is very shareholder friendly, and it has been very nice to see,” says Sterne Agee analyst Shaw Wu.