Apple Employees See Greater Returns Than Google

by: Daya Baran August 24, 2008 | about stocks: GOOG / YHOO    

Daya Baran

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If you were an Apple (AAPL) employee or shareholder, you would be about 300% richer today than a Google (GOOG) employee or shareholder. This is based on a comparison of GOOG and AAPL shares over a five year period between August 27, 2004 to August 22, 2008.

Over that period, Google returned an impressive 355.73% and Apple returned a staggering 1050.52%. Year-to-date, GOOG is down about 5% and AAPL is up about 36%.

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The perception is that all Google employees are making a killing. The first one hundred employees struck it rich and the next 500 have done well but the bulk of employees have not benefited much, if at all. There is also a large group of Google employees who do not have stock because they are contractors and as contractors they do not receive stock.

Free Food Not Cutting It Anymore

The stagnant to declining stock price is making it harder to recruit seasoned employees. These employees are usually making decent money at their present jobs and their stock options have probably done better than 5%. The free food is not cutting it anymore. A recent interviewee said “I could care less about the free food. Pay me what I am worth”. The interviewee with 15 years experience as a product manager was offered  $65,000 a year, free food and no stock because it was a one year contract. He is presently making $115,000 at a Google competitor.

Google does get a lot of job seekers compared to other companies but most of them are in the marketing, sales, and other non core functions. These people dream that one day they will be more than a contractor or their stock will be worth a zillion dollars so that they can retire but in the mean time the best they can get is free food. “We are having difficulty recruiting engineers, competitors are paying well, the bay area is expensive and smart people can find work or start a company very easily today”, said a Google recruiter.

The problem is so great that Eric Schmidt, Google CEO, went on Jim Cramer’s show ‘Mad Money’ to get the attention of investors as well as younger viewers back on the stock. Hence to get them to buy the stock, so demand increases and the stock goes up and thus it would make recruiting easier and appeases the employee base that is growing restless watching everyone else get rich and in Apple’s case, 300% richer.

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This article has 5 comments:

  •  
    Aug 24 04:10 PM
    Dear author,
    What you are indirectly suggesting is "Apple employees and investors, cash out on your Apple stocks now at their highs, quit Apple and go work for Google while their stock is at a bargain!"
    Reply | Link to Comment
  •  
    Aug 24 04:51 PM
    No he isn't. You could just as well interpret it to mean that Apple
    stock will outperform Google by 300% over the next 5 years too.

    Otherwise, the market must be full of "bargains". Good luck!
    Reply | Link to Comment
  •  
    Aug 24 04:51 PM
    No he isn't. You could just as well interpret it to mean that Apple
    stock will outperform Google by 300% over the next 5 years too.

    Otherwise, the market must be full of "bargains". Good luck!
    Reply | Link to Comment
  •  
    Aug 24 05:07 PM
    We have an options affliction.
    Options were to be use where a company is young and does not have the wherewithal to compensate its employees with regular pay.
    The options concept is that the employee stands a good chance to make more if, as a team, the company propers.
    E.g., A company only has enough to offer $8,000 per month to a prospective employee, who is requesting $12,000 per month.
    A mature company that has the wherewithal to pay its employees the going rate should not issue options.
    The issuance of options to employees is, in effect, stealing from the ownership (stockholders) by diluting the stock.
    Who lost out when a secretary made $10,000,000 on Google stock options?
    The shareholders...., of course.

    mikiesmoky@aol.com
    Reply | Link to Comment
  •  
    Aug 24 07:07 PM
    Yeah, but she has great legs.
    Reply | Link to Comment
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