Threat from tech rivals Facebook-owned Meta Platforms for poaching employees, Apple Inc. has given stock bonuses to performing engineers to prevent attrition and retain talent.
As per Bloomberg News, Apple Inc. informed some of its employees last week that they were issued stock options with a vesting period of 4 years. The employees included engineers in hardware and some select software groups. The out-of-cycle bonus and a lock-in period were incentives for employees to stay with the iPhone maker.
The bonuses, which came as a surprise to those who received them, have ranged from about $50,000 (roughly Rs. 37.35 lakh) to as much as $180,000 (roughly Rs. 1.34 crores) in some cases. Many of the engineers received amounts of roughly $80,000 (roughly Rs. 59.76 lakh), $100,000 (roughly Rs. 74.71 lakh), or $120,000 (roughly Rs. 89.66) in shares, said the people, who asked not to be identified because the program isn't public. The perk was presented by managers as a reward for high performers.
The payouts aren't part of normal Apple compensation packages, which include a base salary, stock units, and a cash bonus. Apple sometimes awards additional cash bonuses to employees, but the size of the latest stock grants was atypical and surprisingly timed, the people said. They were given to about 10 percent to 20 percent of engineers in applicable divisions.
The bonus program has irked some engineers who didn't receive the shares and believe the selection process is arbitrary. The value of some of the bonuses equaled the annual stock grant given to some engineering managers. And their value stands to increase if Apple's stock price continues to rise. The shares are up 36 percent this year, putting the company's market capitalization at nearly $3 trillion (roughly Rs. 22,412,675 crores).
A talent drain also has hit other areas, including Apple's self-driving car team. The company needs to maintain its engineering prowess as it works on several next-generation devices, including the car, VR and AR headsets, and future versions of the iPhone. These categories, although unspecified, maybe the ones that Apple needs better than its rivals’. For instance, silicon design is where Apple is making big strides, thanks to its M1 processor, and losing top talent may dent its progress against Intel.
Apple, however, has seen rising defections in the last few months. The change in the rules related to work from the office has led to many engineers leaving the company. Apple has been relatively harsher on its employees as compared to other tech giants, the report further added.
Corporate employees of the company are required to work at least three days a week, from the office. On the other hand, hardware engineers are required to attend the office four to five times a week. However, the company has recently said that they will allow the workers to work from home for the foreseeable future.
Meta has been relatively easy on the work-from-office norms.
Meta has, in the meantime, also stepped in its effort to lure away engineers in the AR, AI, hardware, and software engineering divisions. The social media company with Facebook, WhatsApp, and Instagram in its fold is also raising salary significantly as it focuses on its Metaverse and hardware business.
But Apple acknowledged this month that workers will likely stay at home for the foreseeable future. After scrapping its office-return deadline, Apple said it would issue $1,000 (roughly Rs. 74,700) bonuses to all corporate, retail, and technical-support employees so they can purchase home equipment.
With bonuses, Apple is giving a message that top talent will be rewarded at the company, even if it means going out of the conventional way to hand out stock bonuses like this. And that will help Apple incentivize the urge of employees to stay at the company, especially when there are big and important projects coming up.