Apple (AAPL +1.66%) surprised much of the market when it announced that longtime CEO Tim Cook would be stepping down in September and transition to executive chairman of Apple's board of directors. John Ternus, who has been serving as the company's senior vice president of hardware engineering, has been chosen to become the new CEO.
Similar to when Cook took over for Apple co-founder Steve Jobs, Ternus will step into the top job with much less name-brand recognition than Cook and big shoes to fill. Not only did Cook dramatically reshape Apple's supply chain, but he also delivered tremendous returns to shareholders during his legendary 15-year stint.
If Ternus can take anything away from Cook's run, it should be this $841 billion lesson.
Image source: Getty Images.
Why shareholders will remember Cook fondly
Every CEO has their own strengths and style. For instance, Jobs was known as a product genius with a more intense leadership style that could be ruthless at times, leading to confrontation. But Jobs certainly got results, building products that are iconic today and have gobbled up market share.
Cook was less of a product guy but excelled in supply chain logistics, figuring out how to build Apple's products abroad at much lower costs. His management style was also viewed as more collaborative, hands-off, and less confrontational. Supposedly, Cook would spend the first 10 minutes or more of every one-on-one meeting listening silently to elicit a person's true thoughts, without being influenced by what the other person believed Cook wanted to hear.
NASDAQ: AAPL
Key Data Points
Ternus is likely to be very different from Cook, given that he is also viewed as a product guy who helped create some of Apple's strongest consumer products today. According to 9To5Mac, Ternus has a good reputation as an innovator and is generally well-liked at the company.
But if he tries to emulate Cook in any way, the easiest would be to take the $841 billion move out of Cook's playbook. This, of course, refers to the amount of money Apple spent repurchasing Apple's own stock between 2013 and now, which is also considered the largest buyback program in history.
Share repurchases reduce the number of outstanding shares, effectively giving remaining shareholders a larger piece of the pie, namely earnings per share (EPS). Look at how much Apple's outstanding share count has fallen since 2013, while also accelerating annual EPS.
Data by YCharts.
Share repurchases are also well received by the market because it indicates the company has strong confidence in its strategy and trajectory. Warren Buffett, who is widely considered one of, if not the best, investors of all time, has previously complimented Cook on his job managing the company.
Buffett's company, Berkshire Hathaway, began accumulating Apple shares in 2016 and eventually made Apple the largest position in its massive $300 billion-plus equities portfolio. A few years ago, 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 said at Berkshire's 2025 annual shareholder meeting. "Nobody but Steve could have created Apple, but nobody but Tim could have developed it as he has..."
Share repurchases aren't everything, but an easy move
Now, investors should understand that share repurchases alone aren't a winning strategy. The business still needs to grow earnings and free cash flow, and have a strong strategic direction.
Ternus will face his fair share of challenges, including further developing Apple's artificial intelligence (AI) strategy, which has left most investors somewhat disappointed, and continuing to innovate Apple's product line.
However, if Ternus wants to take an easy lesson from Cook on how to continue delivering strong returns for shareholders, he can look at the $841 billion in share repurchases over the past 13 years and simply keep the program going.
