Apple CEO Tim Cook has led the company along the path to both Steve Jobs-worthy products and a $488 billion valuation, more than Google’s and Microsoft’s combined. He got enough notice to nearly beat out Barack Obama to be Time’s person of the year. Despite all that, life in Cupertino’s executive offices may not be as sunny as you’d think.
“Cook’s record hasn’t been flawless,” observed Time’s Lev Grossman, “but he has presided in a masterly way over both a thorough, systematic upgrading of each of the company’s major product lines and a run-up in the company’s financial fortunes that can only be described as historic.”
Yet Apple’s stock has fallen under Cook’s watch, leading some observers to express concern about market saturation, a slowing pace of innovation and possible retention problems.
Analysts are concerned about Cook’s management shakeup in October, when he elevated hardware design legend Jony Ive after ousting iOS chief Scott Forstall. By some reports, Forstall refused to sign an apology for the Apple Maps fiasco and played politics. Cook said the move was meant to encourage deeper collaboration within the company.
Meantime, Cook has added perks for employees–a common practice among tech companies but something Jobs never really cared about. Among them is an apparently yet-to-be-implemented parallel to Google’s “20 percent time,” which allows workers to pursue their own projects during company hours.
Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School, has described this as a perk “tailored to the type of entrepreneurial, initiative-taking employee that most companies would want to keep.” In an interview, Cappelli called it a sensible perk for Apple to offer, one “designed around win-win issues, especially tapping the interests employees have to work smarter.” He believes Apple’s people likely have a rash of ideas they’re eager to try out.
Cappelli doesn’t believe Apple can continue to trade on its reputation as a cool place to work forever, though, especially as other cool employers crop up.
Pride in the Products
Indeed, Facebook topped Glassdoor’s 2013 list of best places to work. Apple was No. 34. With so many more reviews this year, however, cracking the top 10 was harder than ever, according to a Glassdoor spokeswoman.
However, anonymous reviews on Glassdoor show only a minor drop in CEO approval ratings under Cook. Jobs’s approval rating peaked at 100 percent and dipped to 93 percent for the second two quarters of 2010. Approval of Cook peaked at 98 percent in the fourth quarter of 2011 and now stands at 94 percent.
One reason Apple’s employees like this company is because, as one software engineer’s review put it, “The work you do changes the world. Love it or hate it, people know about your work. That’s more than most can dream for.”
That’s the key to the workers’ loyalty, according to Steve Apfelberg, Vice President of Marketing at TriNet, a San Leandro, Calif., staffing company. Apfelberg doesn’t believe Apple has a retention problem. To him, the perks signal only a difference in Cook’s personal style.
Apfelberg sees the key to retention as being how connected employees are to the vision of the company and making that vision–changing the world–a key part of its culture. That’s something Apple does well. “There’s a lot of loyalty because of the pride in the products that the company produces, the brand and what it stands for,” he says. “They’re proud of what they do.”
In addition, the company’s “incredible” financial performance “certainly doesn’t hurt [with retention] for employees who have stock,” Apfelberg notes. “Even a small number of shares would deliver a nice bump to your core cash compensation.”
But of late, Apple’s stock hasn’t maintained its soaring trajectory. It hit an all-time high of $705 per share in September before sliding to about $512 on Dec. 28, leading to a flurry of analyst opinions about whether a further drop is ahead.
Despite a flurry of product releases and the addition of 300,000 new apps to its App Store, Motley Fool blogger Siddharth Dalal decried not only all the litigation in which Apple is involved, but also what he sees as less innovation. Recent releases, he notes, have been more about incremental improvements instead of leapfrogging the competition.
For the record, Apple paid Cook $4.17 million in 2012, which includes a salary increase of $500,000.