An Apple exodus due to low salaries?

Apparently, Apple engineers get paid less than their Silicon Valley peers. Some are speculating that Apple will need to cough up more cash or face a rash of defections.

I doubt it.

For one thing, Apple's engineers also get stock. Have you noticed the stock price lately? There's more than one way to get paid.

There's also the Apple mystique. No, it doesn't put granola on the table but it counts for something. As Fabrizio Capobianco, my friend and Funambol's CEO, often tells me, Juventus can get top-notch players for less because many of the best soccer players want to play for Juventus at any price.

Lastly, where are these developers going to go? We have a looming recession on our hands. I doubt the employment market is going to see considerable froth in the near term. A safe job at a successful company probably looks more appealing today than a job with an uber-cool start-up that may not pay the bills a year from now.

In sum, Apple has time to figure this out and may not need to do anything.

[Zanny_Blowzsteve]

"Have you noticed the stock price lately?" Umm, YES.

Year to date, Apple stock is underwater, still about 8% under it's January 1st share price, & in that time period, it's performance lags it's closest iPhone competitor, RIMM by about 33%.

In fact, for the last few years, the Blackberry maker has stomped Apple's performance by a 3 to 1 margin every year of the last 5. (The last 5 being the only time in Apple's history that it's stock price hasn't been a virtual flatline.) So When you ask, ""Have you noticed the stock price lately?" , the answer is, Yes we have, and it's not looking so good. Just think, in another $20 or so, it'll be where it was last December. Gee.

[Thomas, David]

if i close one eye, and squint real hard, with ear deafening music in the background ... I MIGHT have the same opinion as you do.

[ausernamenoonehaschosen]

When you look at stocks you don't look at them on the scale of months, but years. Over the last several years apple stock has significantly increased in value. Anyway, the stock has almost completely recovered from the drop after January.

Furhermore, considering the iPhone is only a year old, it is doing very well in the market.

[setgo]

Zanny you really shouldn't talk about stocks if you don't know much. Just a word of advice so you don't look foolish in the future.

[Zanny_Blowzsteve]

Wooo-Heeee ! I get to shut 2 idiot fanbois up w/ith one post ! "Don't look at stocks on a scale of months, but years" .---- OK ! 5YEARS: RIMM - UP 3600%, AAPL UP 1800% - RIMM WON THAT ONE, doubling Apple's performance. 2YEARS: RIMM - UP 600%, AAPL - 210%, (like I said, RIMM tripled Apple's performance. 1YEAR: RIMM UP 142%, AAPL - only 42% (for those that cant count, {this means you setgo, & you, ausernameonehaschosen,} it means RIMM more than tripled AAPL's performance. - Those figures are all for YEARS, NOT MONTHS. When we get to months, 6MONTHS, RIMM is UP 42%, AAPL is DOWN 1%, & YEAR TO DATE - RIMM is UP 26% & AAPL is DOWN 9%. Don't take my word for it, fanbois, go look it up for your selves, Apple share holders are getting their butts handed to them in the smartphone market by RIMM, the same way Microsoft niche-slapped them in the 90's. BEEEEEEEEEE..

[hammeroftruth]

Wow Zanny! RIMM is doing so well they are only about $22 up from December. Looks like Apple isn't the only stock that's not doing super. It might be this thing that we have called a recession that might be affecting the stock prices.

Do ya think?

[davemc]

high stock may help retain existing employees, who are actively vesting. High stock prices and lower salaries may actively discourage new hires, since the top side always appears more risky (e.g. it's easier to imagine a $15 stock going to $90 than to imagine a $200 stock going to $1200). If new hire salaries rise to incorporate this fact, then older employees may become anxious to se their salaries rise to match.

The other points: coolness factor, belief in the Apple mystic, downturn in hiring (which I haven't seen in the Valley actually) are still valid points.

[StriderMac]

I would agree that AAPL stock has been a roller coaster ride so far this year, but with the iPhone taking 27% of RIMMs market share in less than a year its impressive no matter who's smack-boi you are. RIMM was relatively flat for about 4 years there while AAPL steadily climbed. And let's now forget the outages that RIMM suffered that caused everyone to think that it was game over for RIMM. I expect the iPhone to continue to gain on the Blackberry and eventually overtake its market share in the next two years. Ever thought about keeping your money in both, or are you so much into the smartphone religious wars that its far more important for you to "right" then to be a good investor? Just a thought.

[johnsin]

Well let me answer a couple of your questions. First of all the turn over at Apple is bad. People are constantly being fired, and its a very hard place to work at. You are constantly afraid that someone is going to come in and take your job because everyone wants to work there, and people will take massive cuts in wages to get in that place. Only to realize it wasn't worth it. (I realized that). Second.. The stock options aren't anything to get all excited about. Being that your strike price is usually the market price at the time you sign your papers, and you probably are only getting 1/4 of your shares at your year cliff.. The amount of profit you are going to make after capital gains.. might help you pay some bills off. You are definitely not going to feel an upgrade in your lifestyle or standard of living. You are more likely to get more money by leaving Apple in a year and taking a new job that pays 20k more. That's what I did..

Stock only matters if you are startup and you get bought by a big guy. That's where you see your crappy worhtless 5000 shares of startup stock .. end up coming in at a $2 dollar strike price with a market value of $80 with a 1 to 1 conversion in the new company. That's when stock options matter. With a big established company like apple. It's almost better off to say no to the options, and take the salary increase and stick it in a 401k and IRA. You are probably going to do better in the long run then put all your eggs in the basket with company stock. I know a lot of people at Enron that would agree with me.

[Zanny_Blowzsteve]

StriderMac, I don't know where you're getting your information, but it's WAY WRONG !

RIMM? "relatively flat for 4 years, while Apple climbed?" Here's a chart showing both stocks, please point out the "flat for 4 years". This chart shows that at the very least, RIMM was at least doubling, & usually tripling each year. Also notice that it's RIMM that has risen 8,000% while AAPL has risen only 2,000% . P.S. Since iPhone's release, RIMM has continued to increase it's market share, even more than iPhone has. just thought you'd like to know that.

http://finance.yahoo.com/echarts?s=RIMM#chart8:symbol=rimm;range=my;compare=aapl;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

[soma_king]

Another reason for an Apple exodus: Increasing demand for Apple know-how. As market share grows, there's increasing demand for engineers (in particular) who know the technology.

The Apple tech stack is very deep and mature, and is growing with the iPhone SDK. As a former NeXT employee, I can speak from experience.

[oxtail01]

I really would like some accurate data that will back up this idiotic writer's assertion the "apparently, Apple engineers get paid less". The data need to be inclusive of ALL benefits, not just straight pay,

[make_or_break]

As for AAPL's stock price: how long do you really think it will keep blossoming? Stock options are great and all, but they only pay off IF the valuation keeps rising. Apple's share value has for the most part been level this year (when compared against its dramatic rise up). iPods still dominate the market, but for all intent and purposes there's only one way to go for them. The iPhone has had mixed signs; despite its popularity both ATT and Apple seem to have also implied that all the EXPECTED market capture and anticipated dominance was indeed unfulfilled and ultimately unrealistic. BlackBerrys still dominate enterprise, despite the iPhone's popularity with individual consumers. And even though Macs--particularly in laptop form--have sold especially well, Windows still continues to dominate even if Vista has been generally DOA with enterprise, at least up until now.

.

Then there's the speculation about Steve Jobs and the state of his health. He was looking rather Paul Newman-like, (i.e., looking disturbingly gaunt at WWDC), and that would be EXTREMELY detrimental for both Apple's own well-being and of course its share price.

[smokified]

In sum, this article may or may not be anything that should ever have been written....

The 86KB used to store this article should be purged.

[JohnMcGrew]

Stock options are nice, but they can't compare to cold, hard cash. For lower level employees, they usually take years to redeem, and it's hardly a sure bet that they ever will. (Remember Enron?) In addition to that, since you are already dependant upon your job for your income, it's not particularly wise to also be dependant on the same company for your investment portfolio. Your job and net worth could evaporate at the same time.

[rjw_mpwr]

ok. so poster believes a good engineer should work cheap for apple, just because there is a recession? so, by your logic, monster should be out of business now. in case you don't know, a good engineer can find a job any day. also, personally, company name does nothing for me. if another company offers 30% pay increase, you don't think i am going to jump just because i work for apple or micrsoft or oracle?

[mbjr]

Upset at earning $89,000 at Apple? Man...I WISH I had that problem. :(