February 21, 2025 – Meta Platforms, the parent company of Facebook, has decided to reduce its yearly allocation of stock options for its employees by approximately 10%, despite the company’s stock trading at record highs this month. This move, reported by the Financial Times, marks a notable shift for the social media giant, even as it continues to experience strong financial performance and growth.
Employees at Meta typically receive annual equity refreshers as part of their compensation package, which often constitutes a significant portion of their total pay. Along with base salaries and annual bonuses, these stock options are designed to vest over four years, with a portion of the equity becoming available to employees every three months. However, according to multiple sources familiar with the matter, most employees have been informed that their equity allocation this year will be reduced by 10%. The exact amount will vary depending on an individual’s location and their level within the company.
The decision to cut back on stock options comes despite Meta’s impressive performance on the stock market, with the company’s shares hitting record highs recently. These gains were largely attributed to favorable developments, including the U.S. Supreme Court’s decision to uphold a law banning TikTok, which boosted Meta’s stock price. Additionally, Meta’s focus on artificial intelligence (AI) infrastructure, with CEO Mark Zuckerberg announcing plans to spend up to $65 billion in AI expansion, has also contributed to the company’s positive market outlook.
However, Meta’s decision to cut stock options reflects a broader trend within the company to re-evaluate compensation and performance management. The reduction in stock options is part of a wider restructuring effort, which also includes an increase in the target bonus for executive officers. According to a regulatory filing from Meta, the company has approved an increase in the bonus target for its executive team to 200% of their base salary, up from the previous 75%. Notably, this updated bonus plan will not apply to CEO Mark Zuckerberg, who remains excluded from these changes.
Meta has also made significant moves to adjust its workforce, with the company announcing earlier this year that it would trim about 5% of its “lowest performers.” This reduction in workforce is aligned with Zuckerberg’s goal to raise performance standards across the company. The social media giant has warned employees to expect more job cuts in the future, underscoring the company’s continued efforts to streamline operations and focus on improving productivity.
Despite these adjustments, Meta has remained resilient in terms of its financial performance. The company exceeded Wall Street’s revenue expectations for the fourth quarter of 2024. However, it also cautioned that sales in the first quarter of 2025 might fall short of estimates. This mixed outlook has led to some uncertainty regarding the long-term impact of Meta’s investments in AI-powered tools and the broader economy’s influence on the tech sector.
Meta’s shares closed down 1.3% at $694.80 on Thursday, reflecting the market’s reaction to both the mixed revenue outlook and the news of reduced stock options for employees. While the company’s long-term strategy appears to be focused on AI-driven growth, the decision to adjust employee compensation and performance standards signals a more cautious approach as Meta navigates the evolving tech landscape.
As Meta continues to face challenges related to its workforce and shifting compensation strategies, it remains to be seen how these changes will impact employee morale, recruitment efforts, and the company’s ability to maintain its market-leading position in the ever-evolving social media and tech industries.