Meta awards executives stock options worth up to $921 million while laying off 700 employees | TNW

      Meta revealed in SEC filings on Tuesday that it had granted stock options to six of its top executives, marking the first such awards since the company went public in 2012. Just hours later, it laid off around 700 employees across various departments, including Reality Labs, recruiting, sales, and Facebook. These options will only hold value if Meta's market capitalization reaches $9 trillion by March 2031, which is approximately six times its current valuation of around $1.5 trillion. Should that happen, four of the six executives could each potentially earn up to $921 million.

      The timing of these events was striking and did not go unnoticed by employees. Meta’s workforce has endured consecutive layoffs over the past two years, along with cuts to stock compensation for regular staff, all while the corporate narrative has underscored efficiency and performance. In contrast, the executive option grants present a different narrative: one where the company’s leadership is motivated to chase such ambitious growth goals that achieving them would position Meta as the most valuable company in history by a significant margin.

      The details of the awards

      The beneficiaries are Andrew Bosworth, chief technology officer; Chris Cox, chief product officer; Javier Olivan, chief operating officer; Susan Li, chief financial officer; Jennifer Newstead, chief legal officer; and Naomi Gleit, head of product. According to an Equilar analysis featured in The New York Times, Bosworth, Cox, and Olivan could potentially earn up to $921 million if all conditions are met. Li's package is estimated at up to $161 million. Mark Zuckerberg, who controls Meta through supervoting shares, is not included in this group.

      The options will vest in tranches based on share price benchmarks. The initial tranche requires Meta's stock to hit $1,116.08, approximately double its current value. The final tranche is pegged at $3,727.12, which aligns with the $9 trillion market capitalization goal. All options are set to expire in March 2031, providing the executives five years to meet the targets. If the stock fails to reach the initial threshold, the awards hold no value.

      Meta has characterized these grants as tools for retention, which is not entirely far-fetched. The competition for AI talent has reached unprecedented levels, with Meta reportedly offering up to $300 million over four years to retain top AI researchers, as noted by Fortune and TechCrunch. OpenAI, Google DeepMind, and Anthropic are all vying for the same pool of experienced technical and executive talent, and losing key officers during a time of significant AI investment could be costly.

      The financial implications of the target

      To achieve a $9 trillion valuation, Meta would need to sustain a compound annual growth rate of about 35 percent over five years. For perspective, Apple, the currently most valuable public company, is valued at around $3.5 trillion, and no company has ever reached a $9 trillion valuation. Meta would need to more than double Apple's current worth.

      To attain this target, the company is focusing heavily on artificial intelligence. Meta plans to invest between $115 billion to $135 billion in capital expenditures by 2026, marking an increase of around 75 percent from the previous year, primarily aimed at AI infrastructure: data centers, custom chips, and computing resources necessary for training and deploying its models. The company believes AI will revolutionize its advertising operations, enhance new products in augmented and virtual reality, and create entirely new revenue opportunities.

      This strategy comes with a notable financial cost, already evident in Meta's financial statements. In 2025, cash costs related to employee stock-based compensation reached about $42 billion, absorbing nearly 96 percent of its $43.6 billion in free cash flow. Although stock-based compensation is a non-cash expense on the income statement, the resulting dilution and the cash costs tied to tax withholding and buybacks to counteract dilution are very real. When a company’s stock awards nearly deplete its free cash flow, the margin for error on growth forecasts diminishes significantly.

      The two-tier workforce dilemma

      The recent executive option grants come at a time making them politically challenging to justify. Meta reduced stock-based compensation for regular employees by five percent in 2025, following a ten percent cut the year before. The 700 layoffs announced alongside the option filings were the second wave of cuts this year, and the company's broader restructuring over the past three years has eliminated more than 20,000 positions.

      The message to employees is unmistakable, even if Meta would not express it this way: the company values its senior leadership as its most important asset and is prepared to invest heavily to retain them. Everyone else is regarded as a variable cost to be optimized. While this is a common stance for large tech companies, it is rarely communicated as transparently as in Meta's recent announcement.

      The comparison to Tesla is relevant here. Elon Musk’s 2018 compensation package, originally valued at $56