Apple has issued rare out-of-cycle bonuses worth hundreds of thousands of dollars to members of its iPhone Product Design team in an effort to slow a wave of departures to artificial intelligence startups building competing devices.
The bonuses, granted as stock units that vest over four years, are worth roughly $200,000 to $400,000 per employee over the full vesting period, with the potential for a larger payoff depending on Apple’s stock performance. The structure is designed to keep engineers in place, as employees must remain at the company to receive the full value of the awards. Apple has not commented publicly on the move.
OpenAI has emerged as the most significant threat, having hired former Apple design chief Jony Ive to help develop a new generation of AI-focused devices. OpenAI’s hardware division is run in part by Tang Tan, a former Apple veteran who previously oversaw the very iPhone product design team now receiving the bonuses. Tan’s group has hired several dozen Apple engineers, including those who worked on the iPad, Apple Watch, and Vision Pro. The bonuses Apple is offering are a fraction of what OpenAI and other startups are paying, with some companies offering individual Apple engineers roughly $1 million in annual stock compensation to leave.
Newer startups are also targeting Apple’s talent. Figure AI founder Brett Adcock recently outlined plans for a new AI gadgets company called Hark, whose lead designer previously worked on the iPhone Air. The startup has also brought on Apple product design engineers from within the same team receiving the retention bonuses.
The competition reflects a broader industry shift toward AI-powered hardware aimed at challenging the iPhone as consumers’ primary device. Apple is working to counter that shift with its own lineup, including smart glasses, new AirPods, and a Siri-powered pendant equipped with computer-vision cameras. The company has previously issued similar retention bonuses during past poaching concerns, and last year raised pay for its in-house AI models group as Meta made recruitment offers worth more than $100 million in some cases.
Apple turns 50 next month, and the continued loss of key engineering talent is emerging as one of its most pressing challenges heading into that milestone.
