If New Apple CEO John Ternus Takes Anything Away From Tim Cook’s Legendary 15-Year Run, It Should Be This $841 Billion Lesson
Apple (AAPL +0.44%) stunned a lot of the market when it introduced that longtime CEO Tim Cook can be stepping down in September and transition to government chairman of Apple’s board of administrators. John Ternus, who has been serving as the corporate’s senior vp of {hardware} engineering, has been chosen to turn out to be the brand new CEO.
Similar to when Cook took over for Apple co-founder Steve Jobs, Ternus will step into the highest job with a lot much less name-brand recognition than Cook and large sneakers to fill. Not solely did Cook dramatically reshape Apple’s provide chain, however he additionally delivered large returns to shareholders throughout his legendary 15-year stint.
If Ternus can take something away from Cook’s run, it needs to be this $841 billion lesson.
Image supply: Getty Images.
Why shareholders will keep in mind Cook completely
Every CEO has their very own strengths and magnificence. For occasion, Jobs was often known as a product genius with a extra intense management fashion that could possibly be ruthless at instances, resulting in confrontation. But Jobs definitely bought outcomes, constructing merchandise which can be iconic at present and have wolfed up market share.
Cook was much less of a product man however excelled in provide chain logistics, determining the way to construct Apple’s merchandise overseas at a lot decrease prices. His administration fashion was additionally considered as extra collaborative, hands-off, and fewer confrontational. Supposedly, Cook would spend the primary 10 minutes or extra of each one-on-one assembly listening silently to elicit an individual’s true ideas, with out being influenced by what the opposite individual believed Cook wished to listen to.
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Ternus is prone to be very completely different from Cook, given that he’s additionally considered as a product man who helped create a few of Apple’s strongest client merchandise at present. According to 9To5Mac, Ternus has popularity as an innovator and is mostly well-liked on the firm.
But if he tries to emulate Cook in any approach, the simplest can be to take the $841 billion transfer out of Cook’s playbook. This, after all, refers back to the sum of money Apple spent repurchasing Apple’s personal inventory between 2013 and now, which can also be thought of the most important buyback program in historical past.
Share repurchases scale back the variety of outstanding sharessuccessfully giving remaining shareholders a bigger piece of the pie, specifically earnings per share (EPS). Look at how a lot Apple’s excellent share rely has fallen since 2013, whereas additionally accelerating annual EPS.
Data by YCharts.
Share repurchases They are additionally properly obtained by the market as a result of it signifies the corporate has sturdy confidence in its technique and trajectory. Warren Buffett, who’s extensively thought of certainly one of, if not the perfect, traders of all time, has beforehand complimented Cook on his job managing the corporate.
Buffett’s firm, Berkshire Hathawaystarted accumulating Apple shares in 2016 and finally made Apple the most important place in its large $300 billion-plus equities portfolio. A number of years in the past, Apple made up about 40% of the portfolio.
“I’m somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I’ve ever made,” Buffett stated at Berkshire’s 2025 annual shareholder assembly. “Nobody but Steve could have created Apple, but nobody but Tim could have developed it as he has…”
Share repurchases aren’t every little thing, however a simple transfer
Now, traders ought to perceive that share repurchases alone aren’t a successful technique. The enterprise nonetheless must develop earnings and free money stream, and have a powerful strategic course.
Ternus will face his justifiable share of challenges, together with additional growing Apple’s artificial intelligence (AI) technique, which has left most traders considerably upset, and persevering with to innovate Apple’s product line.
However, if Ternus needs to take a simple lesson from Cook on the way to proceed delivering sturdy returns for shareholders, he can take a look at the $841 billion in share repurchases over the previous 13 years and easily maintain this system going.
