Meta, the parent company of Facebook, has approved a substantial increase in executive bonus potential while simultaneously reducing stock compensation for regular employees and continuing its workforce reduction efforts.
According to a recent Securities and Exchange Commission filing, Meta executives could now receive bonuses up to 200% of their base salary, a notable increase from the previous 75% cap. The company states these "variable cash incentives" aim to align executive focus with company priorities and reward corporate achievements. This change excludes CEO Mark Zuckerberg, whose compensation structure differs.
At the same time, Meta has decreased the value of annual equity refreshers for regular employees by approximately 10%. These stock-based compensations, which vest over four years, represent a key component of employee pay packages. For instance, an employee previously receiving $220,000 in stock refreshers would now get about $200,000 worth of restricted stock units over the same period.
The timing of these compensation changes coincides with Meta's latest round of job cuts, targeting approximately 4,000 positions or 5% of its workforce. CEO Mark Zuckerberg characterized these cuts as focusing on "low performers" while the company streamlines operations and increases investment in artificial intelligence.
Meta justified the executive bonus increase by citing market analysis showing their executives' total cash compensation was at or below the 15th percentile compared to similar positions. The new structure aims to position executive compensation at the 50th percentile.
Despite the job cuts, Meta plans to backfill these positions later this year, with a particular focus on machine-learning engineers, indicating a strategic shift toward AI development.