Meta recently approved a new compensation plan that could allow executives to receive bonuses of up to 200% of their base salary, according to a recent SEC filing. The bonus plan aims to incentivize top executives to focus on company priorities and deliver strong results, rewarding them for achieving company goals.
This announcement coincides with Meta’s plans to reduce its workforce by around 4,000 employees, which is about 5% of its total workforce. Additionally, the company is cutting the value of equity refreshers for some staff by approximately 10%, according to sources familiar with the matter.
Meta’s New Executive Bonus Structure
As part of the newly approved plan, Meta will offer “variable cash incentives” designed to motivate its executive leadership. The plan could increase bonuses from 75% to as much as 200% of executives’ base salaries. However, the boost will not apply to Meta CEO Mark Zuckerberg, whose compensation structure typically revolves more around stock options rather than performance-based bonuses, a common practice for CEOs.
In the same filing, Meta highlighted that its Compensation Nominating and Governance Committee had analyzed market data for executive pay and determined that the target cash compensation for its executives had been at or below the 15th percentile compared to similar roles in the market. With the new plan, Meta aims to bring its compensation in line with the 50th percentile, offering more competitive pay to retain top talent.
Impact on Employees: Equity Refreshers Reduced
Along with the bonus plan, Meta has reduced the value of its annual equity refreshers by about 10%, impacting some employees. Equity refreshers, typically offered in the form of restricted stock units (RSUs), are a major component of employee compensation at Meta.
For example, employees who were previously scheduled to receive $220,000 worth of RSUs over a four-year vesting period will now receive approximately $200,000. These adjustments come as Meta aims to streamline operations and manage costs effectively, especially as the company invests heavily in artificial intelligence.
Meta’s Workforce Reductions and Future Hiring Plans
The bonus and equity refresher adjustments come amid a round of job cuts at Meta. In early February, CEO Mark Zuckerberg announced that Meta would reduce its workforce by around 4,000 employees. The decision is part of Meta’s ongoing efforts to focus on “low performers” and streamline operations for what Zuckerberg has called “an intense year” ahead.
Despite the job cuts, Meta is ramping up its hiring efforts, particularly in the areas of machine learning and AI. The company is accelerating recruitment for machine-learning engineers in February and March, with plans to backfill roles in the coming months as part of its long-term investment in AI technologies.
