When Apple fires an executive, the company is rarely straightforward about the situation. Apple never puts out a press release stating plainly that the executive was canned. So Tuesday’s unexpected announcement that Angela Ahrendts, Apple’s head of retail, is leaving in April led many to suspect she was fired.
That’s because the announcement came as a surprise and seems rushed. She’s certainly not retiring or quitting to join another company. The press release phrase “new personal and professional pursuits” sounds like code for “canned.”
Did Angela Ahrendts get fired?
Additionally, most of the news stories about Ahrendts’ departure point out that it’s happening during the first-ever iPhone sales slump, conflating the two. The subtext is that she’s underperforming and has to go.
Ryan Jones, an app developer with a popular Apple-centric Twitter feed, argues that Apple fired Ahrendts. His reasons: the timing of the announcement, coded language in the press release, and a claim that she was just four months from vesting stock.
“Angela turned Apple Stores into a frustrating mess,” he wrote. “Service and buying are both slow and maddening.”
However, it’s not so clear-cut. Several compelling clues suggest that Ahrendts jumped ship and rather than being pushed.
No ‘gardening leave’ for Angela Ahrendts
The biggest tell when Apple cans an executive is that they get put on “gardening leave.” Apple often ties up fired executives with a role such as “special adviser to the CEO,” which is code for a pair of golden handcuffs preventing them from joining the competition.
Both Tony Fadell, the former head of Apple’s iPod division, and Scott Forstall, who was responsible for developing the first version of iOS, were named special advisers to the CEO for a year or so, preventing them helping rivals develop knockoff iPods or iPhones.
This is the biggest clue that Apple fired a departing executive.
However, it doesn’t always happen. John Browett, Apple’s former head of retail and Ahrendts’ predecessor, was fired in 2012 but wasn’t given gardening leave.
It’s arguable that this could be the case for Ahrendts, too. Unlike Fadell and Forstall, Ahrendts doesn’t seem to have specialist engineering skills that could boost competitors’ efforts.
Ahrendts’ skills are arguably more people-focused. It seems her talent was big-picture: a vision for the stores and events to attract a constant stream of shoppers.
This may be dismissive, though. She likely possesses detailed knowledge of Apple store logistics and operations. Not to mention a Rolodex full of world-class architects, designers and construction specialists that could help rivals build stores and strike real estate deals around the world.
Angela Ahrendts’ performance at Apple
Although new reports conflated slumping iPhone sales with Ahrendts’ departure, there’s no sign that she wasn’t performing. At a time when Main Street shops and shopping malls are dying at record rates, Ahrendts seems to have been very successful at keeping Apple’s stores relevant. The chain of 506 stores are as packed as ever and there’s a full roster of events and presentations at stores worldwide. During her tenure, average sales per square foot grew by 21% to $5,637, according to research firm eMarketer.
Ahrendts’ ample compensation reflects Apple stores’ ongoing success. In the five years she worked at Apple, she earned $170 million in salary, bonuses and stock, according to an estimate by Bloomberg.
Her annual bonuses and stock grants are tied to metrics like Apple’s overall income and sales targets. (However, it remains unclear if that includes global sales or sales through her retail channel.)
The majority of her compensation came from performance bonuses and stock, and it looks like she hit her numbers every year. In 2017, for example, she earned about $1 million in salary, $3 million in bonuses and $20 million in stock. (It’s not possible to tell if she got the maximum bonus or some lesser amount. She may have been awarded half of what she potentially could have earned. However, her compensation for the last five years came in more or less the same — roughly $25 million annually. She received some kind of performance bonus every year.)
Tim Cook’s ‘bittersweet’ farewell
Tim Cook gave Ahrendts a nice send-off note, which he wouldn’t have done if she’d been fired. On Twitter, Cook wrote: “A bittersweet set of announcements today. Angela, we thank you for all you’ve done to inspire and energize our teams. Deirdre, we can think of no one better to lead our stores and all of Apple’s people in their mission to change lives for the better.”
A bittersweet set of announcements today. Angela, we thank you for all you’ve done to inspire and energize our teams. Deirdre, we can think of no one better to lead our stores and all of Apple’s people in their mission to change lives for the better. pic.twitter.com/PekF8rU9Qe
— Tim Cook (@tim_cook) February 6, 2019
(Cook handed off Ahrendts’ job to Deirdre O’Brien, one of his longest-serving and most-trusted lieutenants. A 30-year Apple veteran, O’Brien previously held the title of vice president of human resources, or “VP of Peeps.” She worked under Cook in operations for a long time.)
Angela Ahrendts misses London
As noted by John Gruber, Vogue Business reporter Suzy Menke, who profiled Ahrendts just last week in a positive piece, quoted Ahrendts on Instagram saying the departing Apple leader misses her grown-up kids, who live in London. Ahrendts was based in the U.K. capital while CEO of Burberry and clearly misses the city.
“I’ve been gone from London almost five years,” she told Menke. “I have two kids there — they were at university when we moved and they decided to stay. My son is a budding musician with an honours degree in song writing and my daughter has an honours degree in marketing — she works for a start up magazine and he does gigs round London and writes great music! I miss them, obviously. It’s such a great city and we try to make it back as much as we can. But California is not so bad!”
To some, Ahrendts’ unexpected departure might seem rushed and fishy. However, to me it looks like she just felt it was time to leave Apple.