Apple Expands Hiring Freeze, Delays Bonuses for Some Employees

[surfzen21]

You don't think they are overly paid?

View attachment 2173704

APPLE INC Executive Salaries & Other Compensation

Salary, bonuses, stock options, stock awards and other compensation information for top executives at APPLE INC.

www1.salary.com

Everything is listed pretty much on this report. Check it out!

https://www.sec.gov/Archives/edgar/data/320193/000130817923000019/laap2023_def14.pdf

What stands out to me is how Apple is taking advantage of its female employees.

How is Kate their GC and a secretary .

On a more serious note, that salary is crazy for a GC.

 

[MozMan68]

What stands out to me is how Apple is taking advantage of its female employees.

How is Kate their GC and a secretary .

On a more serious note, that salary is crazy for a GC.

$1 million salary is crazy to be the GC of one of the largest companies in the world? I think it's "good", but not crazy.

Bonus potential is 200% ($2 million)...I would think 100% is fine, but that's me.

Its the stock options worth UP TO $20 million that you are probably referencing. And that's the POSSIBILITY based on performance of the company and the person...not a guarantee. But still...

 

[Abazigal]

I am not predicting demise at all. I am suggesting that Apple is showing signs of Stages 1 - 3. They can certainly change their behavior and stop the trend, which I hope they will.

This is of course, assuming the following:

1) Apple is indeed exhibiting those signs.
2) You are right in that those signs point to problems with Apple's leadership.
3) It is indeed a problem that warrants attention, and the proposed solution doesn't end up making things worse for Apple.

I say this because a decade ago, people were using Christianson's theory of disruption to posit that the iPhone would by commoditised by numerous cheaper, better-specced android phones flooding the market. That android had a way larger market share than iOS further lent credence to this theory, and everyone just seemed so convinced that Apple was doomed unless they too jumped on the bandwagon to offer a cheaper iPhone.

Apple instead went on to do the opposite. iPhones got more expensive, which (funnily enough) actually led to more people buying iPhones, not less. What everyone got wrong was that Apple wasn't selling a product (that could be commoditised); they were selling an experience (which the competition couldn't replicate). One sufficiently differentiated enough that people were willing to pay a premium for.

Which brings me back to your 3 points.

1) I cannot comment on whether Apple management is being overly paranoid. They have always seemed that way to me.

2) I don't think it's a bad thing to have a hiring freeze on R&D. It just means Apple is being extremely disciplined when it comes to deciding how and where they want to devote their resources towards. The counterpoint is that you then have a case like Meta where they blew 10 billion on the Metaverse with nothing to show for it.

3) My understanding is that Apple isn't reducing or freezing bonuses. They are simply consolidating them into an annual payout to streamline the process for the entire company. This strikes me as more of an administrative move, not a cost-cutting one.

I guess the point I am trying to make here is that Apple still continues to strike me as an enigma in that many conventional business theories don't seem to readily apply to Apple. Very often, they cover an industry, then they attempt to draw a link to Apple from time to time. I feel this tends to lead to error and inaccurate analysis, because you are comparing Apple too much to other companies, and you are not allowing Apple’s unique attributes to speak for themselves or recognise how Apple is able to set themselves apart from the competition.

Instead, what I now choose to do is to first start with Apple, and then I analyse the industry that Apple operates in. What I see a lot of people still do today is that they just treat Apple as any other company. But Apple does a lot of things differently, and if all you are doing is simply comparing Apple to everyone else and then go “Hey, Apple isn’t following what everyone else is doing, so I don’t think whatever Apple is doing is going to work” or try to force-fit a theory to match Apple, I think they go down the wrong path.

 

[MozMan68]

This is of course, assuming the following:

1) Apple is indeed exhibiting those signs.
2) You are right in that those signs point to problems with Apple's leadership.
3) It is indeed a problem that warrants attention, and the proposed solution doesn't end up making things worse for Apple.

I say this because a decade ago, people were using Christianson's theory of disruption to posit that the iPhone would by commoditised by numerous cheaper, better-specced android phones flooding the market. That android had a way larger market share than iOS further lent credence to this theory, and everyone just seemed so convinced that Apple was doomed unless they too jumped on the bandwagon to offer a cheaper iPhone.

Apple instead went on to do the opposite. iPhones got more expensive, which (funnily enough) actually led to more people buying iPhones, not less. What everyone got wrong was that Apple wasn't selling a product (that could be commoditised); they were selling an experience (which the competition couldn't replicate). One sufficiently differentiated enough that people were willing to pay a premium for.

Which brings me back to your 3 points.

1) I cannot comment on whether Apple management is being overly paranoid. They have always seemed that way to me.

2) I don't think it's a bad thing to have a hiring freeze on R&D. It just means Apple is being extremely disciplined when it comes to deciding how and where they want to devote their resources towards. The counterpoint is that you then have a case like Meta where they blew 10 billion on the Metaverse with nothing to show for it.

3) My understanding is that Apple isn't reducing or freezing bonuses. They are simply consolidating them into an annual payout to streamline the process for the entire company. This strikes me as more of an administrative move, not a cost-cutting one.

I guess the point I am trying to make here is that Apple still continues to strike me as an enigma in that many conventional business theories don't seem to readily apply to Apple. Very often, they cover an industry, then they attempt to draw a link to Apple from time to time. I feel this tends to lead to error and inaccurate analysis, because you are comparing Apple too much to other companies, and you are not allowing Apple’s unique attributes to speak for themselves or recognise how Apple is able to set themselves apart from the competition.

Instead, what I now choose to do is to first start with Apple, and then I analyse the industry that Apple operates in. What I see a lot of people still do today is that they just treat Apple as any other company. But Apple does a lot of things differently, and if all you are doing is simply comparing Apple to everyone else and then go “Hey, Apple isn’t following what everyone else is doing, so I don’t think whatever Apple is doing is going to work” or try to force-fit a theory to match Apple, I think they go down the wrong path.

For a company of Apple's size, #3 is a HUGE cost savings from both a pure cost associated with making payments once instead of twice as well as a productivity savings on the personnel time side. And from a "perception" standpoint, getting a bonus once a year versus twice will make people THINK that less is getting paid out (which may actually happen once the entire year is taken into account).

 

[I7guy]

No advice here. I’m not suggesting anything one way or the other. I’m only pointing out observations that can be articulated through the lens of the Good To Great series.

My empirical observations over the short time* being interesting in apple is that the company doesn’t fit neatly into buckets.

Those who try to bucket apple’s behavior and patterns distilled to a simple point rarely get it right.

@Abazigal made the same point said differently.
* relative to day 1 people

 

[SoldOnApple]

Hire me, I'll do it for minimum wage if I can sleep and eat at the new campus.

 

[surfzen21]

$1 million salary is crazy to be the GC of one of the largest companies in the world? I think it's "good", but not crazy.

Bonus potential is 200% ($2 million)...I would think 100% is fine, but that's me.

Its the stock options worth UP TO $20 million that you are probably referencing. And that's the POSSIBILITY based on performance of the company and the person...not a guarantee. But still...

Yes, I did mean total compensation and not just salary.

Having a few friends I went to law school with currently serving as GCs of smaller companies, I understand their role well. Its important but the actual legal work get farmed out to other firms. It's a nice gig if you can get it.

Their role is similar to the general contractor of a construction project without the expertise in each area.

I'm not saying reduce her compensation. I guess I'm just saying I'm jealous

 

[Abazigal]

I'm not saying reduce her compensation. I guess I'm just saying I'm jealous

The grass always looks greener on the other side.

 

[citysnaps]

1. It appears that Apple leadership is applying “productive paranoia”, a leadership execution that suggests being overly careful, paranoid, before things get bad; publicized greatly by Jim Collins.

No, not overly careful or paranoid, just sound company management under Cook.

It's no more complicated than that.

 

[Razorpit]

I heavily suggest you check out some of the Good To Great books. Aside from being fun to read (and even better audiobooks to listen to) Jim discusses Apples comeback under Steve 2.0.

The benefit of these books is that they are not suggestions from a “subject matter expert”; rather, all the books are based on many years of comparative research based on thousands of documents and hours of interviews with executives in their key roles at the time.

Apple is a publicly traded company making consumer products for the masses. Their leadership pyramid and focus on growth is not dissimilar from others in the same industry and, lately their market performance has suffered like others in the tech world.

My observations may be completely incorrect. However, there are many examples of Apple’s leadership making huge errors and then doubling down on those errors for years. Again, they do a lot of great things but there appears to be evidence of hubris at Apple these days and it’s very disconcerting.

Here are some big mistakes that Apple acknowledged and often took years to correct:

MobileMe
iPhone price reduction followed by refunds for customers who were overcharged
Final Cut Pro X pre-mature release (which caused FCP to loose to Premiere in the NLE battle)
AntennaGate on iPhone 4
Apple Maps
Apple Watch Edition
Performance reduction for low battery
iPhone 6 issues
Scissor Keyboard on laptops
HomePod pricing
Trash Can Mac Pro
Lack of new MacPro for 7 years
Apple Studio Display stand
Delayed release of 5G
iPhone C

There are more of course. The point isn’t what they get wrong. The point is to alter the decisions away from Hubris and the desire for more and more and more.

What made Apple great in the 2000s was Steve’s (and Tim’s) relentless desire to efficiently manufacture great products that people will love. It was not to make a product better than everyone else. It was to make the best product that they themselves would want and love.

I noticed you left iPod Sock off your list. 😉

 

[7149041]

Everyone whining about Tim's salary, remember that he's getting paid what the shareholders think he's worth. Apple has to pay him enough for him not to go work for someone else, this applies to all employees. everywhere, on every level.

 

[darkus]

A year ago employees were asked to work back closer to normal traditional standards (standards that made Apple what it is), but overly entitled SV workers balked and pushed back and refused.

Claiming that work from home was no different, even though anyone using an Apple device could see how much more buggy software has gotten, more disjointed the software experience has gotten and how repetitive device updates have gotten.

Now revenue is dropping.

And people get mad?

I mean obvious is obvious. Blame those execs tho <shakes head>

 

[4743913]

only a matter of time before Apple starts laying off those HR people..

 

[Abazigal]

Here are some big mistakes that Apple acknowledged and often took years to correct:

MobileMe
iPhone price reduction followed by refunds for customers who were overcharged
Final Cut Pro X pre-mature release (which caused FCP to loose to Premiere in the NLE battle)
AntennaGate on iPhone 4
Apple Maps
Apple Watch Edition
Performance reduction for low battery
iPhone 6 issues
Scissor Keyboard on laptops
HomePod pricing
Trash Can Mac Pro
Lack of new MacPro for 7 years
Apple Studio Display stand
Delayed release of 5G
iPhone C

There are more of course. The point isn’t what they get wrong. The point is to alter the decisions away from Hubris and the desire for more and more and more.

I am genuinely curious as to your take on what you feel these missteps are supposedly a symptom of.

I have my views on issues like Maps, battery-gate, Mac Pro, Studio Display Stand, even the iPhone 5C, and have argued for them more times than I care to remember (some of them are easily essay-length), and I don't see to recall seeing any common issue that might be a cause for concern.

Mobileme - no idea about this, as I wasn't an Apple user then.

iPhone price reduction - so Steve Jobs shot for the moon. Big whoop.

FCP - no idea either

Maps - better to bite the bullet and boot google maps from iOS than be held hostage by them any longer. That maps would take years to improve (and is still being improved) is simply the nature of tech. Such things just take time. You are not going to morph Maps into a clone of Google Maps overnight no matter how much money is thrown at it. I am with Apple on this one.

Apple Watch Edition - Are you referring to the $19000 gold Apple Watch or the ceramic Apple Watch model? Because I actually love the latter.

iPhone 6 - If you mean bend-gate, that was resolved with the 6s. As the supply chain for the iPhone typically takes about a year to set up, I can understand why Apple didn't fix it any earlier.

Antennae-gate - it was a minor issue affecting a small number of users who chose to hold their phone a particular way. It would be fixed with the 4s. As with the iPhone 6 debacle, it's likely not an issue that Apple could have rectified right away, because of the way their manufacturing process is set up.

Battery-gate - how do I summarise this? The issue is a mix of Apple being too secretive and people holding on to their phones for longer than 2 years.

Scissor keyboard - no excuses there. My guess is that Apple thought they could eventually engineer a fix for it. I guess they thought wrong.

HomePod pricing - it likely wasn't cheap to make, and pricing it any lower at the time would have made it unprofitable to sell. Hindsight is always 20/20, but a lot of Apple's pricing decisions make sense when looked through a profit-maximising lens.

Mac Pro - my take is that Apple did lose interest in it for a while, in part because a lot of their time and attention went to the iPad (pro) and wearables. Apple probably did believe that they would successfully migrate a portion of Mac users to the iPad, leaving so few people needing a Mac Pro that they could drop it altogether. When you consider that the Mac Pro is a very niche product (albeit one with a halo effect) vs the very profitable Apple Watch and AirPods market, a case can be made for Apple was right (at the time) to prioritise tablets and wearables over the Mac.

Stand - if you mean the $1k stand, I don't see anything wrong with it. Apple chose to sell them separately because they knew that many people buying the display for the office would possibly opt for a VESA mount, making the stand superfluous. It's a feature, not a bug.

Delayed release of 5g - you mean waiting for 5g modems to not be so power-hungry, and for the 5g network in the US to be more developed?

iPhone 5C - at the time, it was a cheaper iPhone 5. What Apple got wrong was that their clientele wanted the best, wanted to be seen using the best, and were willing to pay for the best. So it's a happy problem when people are opting for your more expensive offering over your cheaper one.

If I were to try and draw a common thread between these incidents, it comes down to the following:

1) Apple likes to wait for a product to be ready before releasing it. It can be in the form of infrastructure (eg: 5g, NFC payments), getting said infrastructure in place (having a critical mass of iPhones before releasing AirTags) or having the capacity (waiting for Samsung to be able to supply sufficient quantities of OLED screens before bringing them to the iPhone 12). It is in part a limitation of their need to manufacture at scale, which in turn means that components and processes very often have to be sourced way in advance. Sometimes years.

2) Their product roadmap, including their decision to focus on wearables over Macs, can (and has) actually be explained using the grand theory of Apple. In summary, it goes back to Apple's overriding desire to make technology more personal for the end user.

3) They are secretive. Sometimes frustratingly so. It is in their company culture to not conduct product R&D in plain sight (like announcing a product years before it's ready). That we choose to spend hours here speculating over why Apple decides to do things a certain way is on us, not on Apple for not being more forthcoming (and they are under no obligation to communicate any more than they strictly need to).

So yeah, Apple is not perfect, but all signs point to Apple remaining a very well-run company overall, and still being a design-led company, even after the departure of Jony Ive, a couple other designers, and with Jeff Williams serving as the bridge between the design team and the rest of Apple leadership.

Apple is pulling away from the competition, and will continue to prosper for a good many years to come.

Viva la Apple! 😊

 

[TwinkieHeist]

I've got news for you... The employees carry the weight at every company and that is what they are paid to do! This is not a Socialist or Communist economy!

I wasn't sure we were in a socialist/communist economy with a few holding all the wealth. Thank you for confirming.

 

[Jorbanead]

Delaying bonuses for employees is some **** when your sitting on Billions and make Billions every quarter. They could easily pay bonuses probably for the next 20 years off just 1 of those Billions!! This is how much Apple cares about its people!

They’re paying the same amount in bonuses. Just instead of paying it over 2 installments, they’re doing bonuses once a year.

I swear people don’t read these articles.

 

[Princejb134]

Good to see they are not doing layoffs yet, I feel sorry for poor Tim though only getting paid $49 million this year...

does he get paid 49 mill in stocks or in direct deposit to his bank account?

 

[Carnegie]

Jobs' incentive comp was paid in options, and not RSU's.

Mr. Jobs did receive stock options after returning to Apple, both in his role as a director and in his role as CEO. But he later voluntarily canceled all outstanding options and received a large RSU grant. That is where the bulk of his compensation came from. He had 10 million shares vest in 2006 (split-adjusted that would be 280 million shares now) at a value of nearly $650 million. Nearly half of those shares were withheld for tax purposes.

That said, even if he'd received most of his compensation through stock options the point made by the poster you were responding to would remain. The value of the options - i.e., the difference between the option price and the value of the shares when the options are exercised - is taxed as ordinary income would be when the options are exercised.

 

[Carnegie]

does he get paid 49 mill in stocks or in direct deposit to his bank account?

When it comes to his RSUs, he receives the number of shares provided for by the RSU award when that award specifies that they vest. But their value will depend on the current share price when they vest and certain performance metrics which will affect how many shares actually vest. Further, more than 50% of Mr. Cook's vesting shares are typically withheld for tax purposes. Whether he sells his vesting shares or not, their value is taxed as ordinary income when he receives them.

 

[I7guy]

I heavily suggest you check out some of the Good To Great books. Aside from being fun to read (and even better audiobooks to listen to) Jim discusses Apples comeback under Steve 2.0.

The benefit of these books is that they are not suggestions from a “subject matter expert”; rather, all the books are based on many years of comparative research based on thousands of documents and hours of interviews with executives in their key roles at the time.

Apple is a publicly traded company making consumer products for the masses. Their leadership pyramid and focus on growth is not dissimilar from others in the same industry and, lately their market performance has suffered like others in the tech world.

My observations may be completely incorrect. However, there are many examples of Apple’s leadership making huge errors and then doubling down on those errors for years. Again, they do a lot of great things but there appears to be evidence of hubris at Apple these days and it’s very disconcerting.

Here are some big mistakes that Apple acknowledged and often took years to correct:

MobileMe
iPhone price reduction followed by refunds for customers who were overcharged
Final Cut Pro X pre-mature release (which caused FCP to loose to Premiere in the NLE battle)
AntennaGate on iPhone 4
Apple Maps
Apple Watch Edition
Performance reduction for low battery
iPhone 6 issues
Scissor Keyboard on laptops
HomePod pricing
Trash Can Mac Pro
Lack of new MacPro for 7 years
Apple Studio Display stand
Delayed release of 5G
iPhone C

There are more of course. The point isn’t what they get wrong. The point is to alter the decisions away from Hubris and the desire for more and more and more.

What made Apple great in the 2000s was Steve’s (and Tim’s) relentless desire to efficiently manufacture great products that people would love. It was not to make a product better than everyone else. It was to make the best product that they themselves would want and love.

I'm a fan of Peter Drucker, who laid much of today's foundation. But I never implied or said Apple was mistake free. I'm with other great thinkers that much success is often followed after failure. And additionally Apple doesn't make rash decisions (at times they may make stupid decisions, but not rash decisions)

My opinion on the above:
- iphone 1 pricing - stupid decision
- antennagate - yep, an unfixable hardware issue in a released product is a lack of quality assurance standards
- Apple maps - releasing apple maps prior to having enough real world data was a bad decision
- Performance issue - another bad decision to not broadcast more widely. However it resolved an issue which faces all devices that use LI batteries
- iphone 6 - not really sure. One can say all products after the fact can require improvment in one way or another
- Homepod pricing - maybe it was mispriced - I bought two
- delayed release of 5g - In hindsight I don't think there is an issue here
- iphone C:? or 5C? - experiment that only partially succeeded

 

[7149041]

I swear people don’t read these articles.

Poor people frothing at the mouth when they hear "billion", no need to read further!

/s

 

[turbineseaplane]

What made Apple great in the 2000s was Steve’s (and Tim’s) relentless desire to efficiently manufacture great products that people would love. It was not to make a product better than everyone else. It was to make the best product that they themselves would want and love.

this ^^

We need to get back to that

(Not holding my breath)

 

[guerro]

giggle farts

 

[fdw777]

I thought we were told our ECONOMY was thriving and growing.

There's an old saying:
"If, IF's and BUT's were CANDIE's and NUT's we'd all have a merry Christmas".

Maybe we should buy more Gold iPhones and Gold Apple Watches....

 

[Realityck]

I thought we were told our ECONOMY was thriving and growing.

There's an old saying:
"If, IF's and BUT's were CANDIE's and NUT's we'd all have a merry Christmas".

Maybe we should buy more Gold iPhones and Gold Apple Watches...to help out AppleTim's.

Why? This industry is one of the few that survives on ten of thousands of used iPhones being refurbed every day. Know any other marketplace where people buy things used so much? Apple gains more people using them everyday, that in turn see App Store transactions, accessories, and service sales.