In an effort to retain talent, Apple Inc. has issued unusual and significant stock bonuses to some engineers.
This seems to be a step to stave off defections to tech rivals such as Facebook owner Meta Platforms Inc.
How Did This Happen?
The news was revealed by the company last week when they informed some engineers in silicon design, hardware, and select software and operations groups of the out-of-cycle bonuses.
According to the sources, these bonuses are being issued as restricted stock units.
Further, these shares vest over four years, this way providing an incentive to stay at the iPhone maker.
Came as a surprise, the bonuses have ranged from about $50,000 to as much as $180,000 in some cases.
The move came as a surprise to those who received them as they received amounts of roughly $80,000, $100,000 or $120,000 in shares as per the sources.
Basically, this perk was presented by managers as a reward for high performers.
So far, the iPhone-making company has declined to comment.
Talent War In Silicon Valley
It seems that Apple is waging a talent war with companies in Silicon Valley and beyond, with Meta emerging as a particular threat.
In the last few months, Meta has hired about 100 engineers from Apple.
Although the same has happened the other way around as Apple also has lured away key Meta employees.
Fierce Competitor In Hardware Segment
With all this happening, the two companies are likely to become fierce rivals in augmented and virtual-reality headsets and smartwatches as both companies are planning major hardware releases over the next two years.
Basically, these payouts are not part of normal Apple compensation packages, which include a base salary, stock units and a cash bonus.
Although sometimes Apple awards additional cash bonuses to its employees, the size of the latest stock grants was atypical and surprisingly timed.
According to the sources, the bonuses were given to about 10% to 20% of engineers in applicable divisions.
However, this bonus program has irked some engineers who didn’t receive the shares, believing that the selection process is arbitrary.
Interestingly, the value of some of the bonuses is parallel to the annual stock grant given to some engineering managers.
The best part is that the value of these stocks stands to increase if Apple’s stock price continues to rise.
Coming to the performance of the shares, this year they are up by 36% hence putting the company’s market capitalization at nearly $3 trillion.
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