You would think that Apple (AAPL), a S&P 500 company that is expected to make more than $ 23 billion in the first quarter, pays higher wages. No.
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It turns out that the world's most valuable and lucrative company pays its average employee less than the other information technology companies in the top 10 S&P 500, much less than Microsoft (MSFT) and Nvidia (NVDA). Compensation data released for 2021 collected by S&P Global Market Intelligence and MarketSmith.
Apple Paychecks also flew close to other major S&P 500 companies from other sectors. Among the top 10 S&P 500 firms, Apple's median salary for 2021 is ranked fifth. The average $ 68,254 Apple paid employees is less than $ 90,000 for the health care company Johnson & Johnson (JNJ) and the $ 295,884 average Alphabet employee (GOOGL) makes. And it is surprisingly lower than the average salary of $ 81,825 at Uber Technologies (UBER). Uber is not the top 10 most important company, but it does offer interesting comparisons as the company is often at the root of compensation debates.
Rising costs such as labor costs are also a major market factor. Companies are struggling to hire and retain top employees. In addition, inflation puts workers at risk of rising rental and transportation costs.
"We continue to receive data suggesting that the labor market is strong, such as leading employment that shows huge profits and unemployment of less than 4%," said Don Rissmiller, a strategist at Strategas. "That tells us that it is possible for wages to go up, when wage increases cause companies to raise prices, making employees demand higher wages and so on."
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Wages Put Pressure on S&P 500?
Big companies like Apple are trying to protect their profit margins. And increasing wages look like the beginning of a war.
The pressure is mounting. Analysts anticipate that the S&P 500 companies will report a 12.1% profit on the ongoing reporting season for the first quarter, said John Butters of FactSet. That dropped slightly from the 12.3% they wanted at the beginning of the quarter. That is still relatively high. It is more than a five-year average of 11.2%.
But the trend is declining as inflation costs higher. "If 12.1% is a real quarterly profit, you will notice the third straight quarter when the index earnings level has dropped," Butters said.
Apple's total profit over the past 12 months is 26.6%. The smartphone maker is expected to report quarterly results on April 28th.
Looking at Apple's Pay
Apple's average salary looks much lower than its mega-cap technology counterparts.
60% lower than median $ 176,858 paid by Microsoft. And it is less than 75% more than the $ 295,884 paid by Alphabets. And Apple chief executive Tim Cook is paid $ 1,446.57 per dollar paid to the average employee. Microsoft CEO Satya Nadella makes $ 281.91 per employee and Alphabet $ 21,36 per employee.
It is important to note, however, that Apple's staff base is different from other megacap technology companies. Many of its employees work in the company's stores. And Apple's average salary is 70% more than the average $ 39,677 salary from Amazon.com (AMZN), which sells well. Amazon.com, however, is the target of a national consolidation campaign, in part to protect high wages.
But that is only part of the story. Apple is actually the smallest employer of other tech giants in the S&P 500. It reports 154,000 full-time employees at the end of its most recent financial year, which is nearly 15% lower than Microsoft and 1.2% lower than its employees.
One thing is certain, though. Apple is the king of profit and that is not expected to change anytime soon. Analysts think Apple will make more than $ 100 billion this calendar year. That’s more than any other S&P 500 company - with a long shot. The second most lucrative company, Alphabet, appears to be making $ 77.5 billion this year, or about a third lower than Apple.
Now we know one reason why.
How The Biggest S&P 500 Companies Pay Their Employees
Apple is very valuable and profitable, but the pay is meh
Apple is the most valuable and profitable, but pay is meh
