The vast majority of Apple’s employees — even its retail workers — are about to get something most hourly paid workers don’t: restricted stock awards in the company.
In a memo emailed to employees, CEO Tim Cook said the company was creating a new program that would award restricted stock, or shares that typically vest over a certain period of time, not just to executives or the managers and engineers who build its products but to hourly paid workers. The new program, Cook wrote in the email, is “designed to reach employees who were not previously eligible, including many in our amazing retail and AppleCare teams,” referring to the company’s customer-service workers.
Before now, Apple employees could buy stock at a discount through a stock-purchase plan, and the company of course offered such awards to executives, as well as to employees in the company’s product groups who were selected by their managers. But the new program, Cook wrote, “effectively makes everyone who works at Apple eligible,” noting that “this is an unusual step.” The email, which was confirmed by an Apple spokeswoman, was reported Wednesday by the site 9to5mac.com.
It’s not uncommon for tech companies to make all employees eligible for such equity grants; but it is rare for companies with as large a contingent of retail workers as Apple has, said Bruce Elliott, manager of compensation and benefits for the Society for Human Resource Management. According to numbers from Apple’s 2014 annual report, roughly half of its employees work in its retail stores.
“It is unusual to see hourly paid employees play in these kind of programs,” Elliott said. “I think they’re taking a long view as it relates to talent and differentiating themselves.”
A 2013 project by the National Center for Employee Ownership found that only about 20 of the largest 900 S&P companies say on their Web sites that they provide restricted stock to most or all employees. And of those 20, the majority are technology firms without a significant retail workforce.
Though rare, the concept is not unheard of. Starbucks issues “Bean Stock” (or restricted stock grants) to all of its employees-including part-time baristas and other store workers-after they’ve worked a certain number of hours.
And some retailers do have discretionary programs that give shares to a select number of lower-wage workers, yet few large companies provide that benefit to the majority of their front-line employees, said Ken Abosch, who leads Aon Hewitt’s broad-based compensation practice for North America.
Because restricted stock vests over time, Apple’s program is a way to help retain workers. It could also help Apple attract the type of knowledgeable, tech-savvy, service-oriented workers it needs to continuing growing its store base-especially as the labor market improves, competition for low-wage workers ramps up, and pay for front-line workers comes under more scrutiny.
Cook’s move is an example of extending typically professional-level perks to the lowest ranks. And though the amounts are comparatively smaller (reports have said the grants would start at $1,000), the effort may still have some resonance given the increased attention paid to the wide salary divide between the highest- and lowest-paid workers in this country. Says Steve Gross, a senior partner at the consulting firm Mercer: “It sends the signal that we’re treating people in a more consistent way.”
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