Apple relies less on stock compensation than rivals to attract employees

in General Discussion edited October 2015
Stock compensation expenses are growing at Apple, even though newer companies like Twitter and Facebook are spending far more on them proportionately, a report noted on Thursday.

Apple's spending increased a tenth of a percentage point in the first half of 2015 to 1.7 percent of revenue, The Information said. In 2013, that ratio was 1.3 percent.

By contrast, Facebook's spending has increased from 11.5 percent in 2013 to 19.3 percent. Over two years Twitter's ratio has come down from a massive 90.4 percent to 38.2 -- thanks to fast-growing revenue this year, and the 2013 number recognizing restricted stock given to workers before the company's IPO.

The difference between old and new tech companies is believed to stem from a variety of factors. Younger companies typically have less cash for salaries and bonuses, and their stock can potentially generate larger windfalls, making for a powerful lure.

Conversely, Apple is one of the world's largest corporations, pulling in hundreds of billions of dollars in revenue annually. Even a 1.7 percent slice can translate into hundreds of millions of dollars in a single quarter, whereas firms like Twitter have far fewer resources.

Nevertheless, some comparable companies are still more stock-oriented than Apple. Google spent $4.18 billion on stock compensation during its fiscal 2014, well over Apple's $2.86 billion.

Although not strictly a cash expense, U.S. accounting rules state that stock compensation must be reported and deducted from earnings.


  • Reply 1 of 5
    The other factor is that stock options and grants vest over time, often only once every year. They are used to retain employees since they are lost if they quit.
  • Reply 2 of 5
    rogifanrogifan Posts: 10,669member
    What about Amazon?
  • Reply 3 of 5
    stpatstpat Posts: 13member
    You can't compare it revenue because it makes Apples proportionally smaller. You should compare it to # of employees or average salary per employee.
  • Reply 4 of 5
    A more useful metric for gauging attracting employees would be the percentage of compensation of gross income that is stock (per employee) averaged for all employees.
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