Meta Platforms Cuts Employee Stock Awards Amid Major AI Investments

Overview of the Changes: Meta Platforms, Inc. META is reportedly reducing stock-based compensation for employees. This move comes as the company invests heavily in capital expenditures to stay competitive against leaders like OpenAI, Alphabet, and Amazon.

Details of the Adjustment: The annual equity-based awards for most employees will be cut by approximately 10%, impacting tens of thousands of workers, according to a Financial Times report referencing multiple sources. These equity awards are an essential component of employee compensation and typically vest over four years, with the specific reductions depending on the employee’s location and level within the company.

As of now, Meta has not issued a statement in response to inquiries from Benzinga.

Meta’s Recent Performance: The rationale behind reducing stock options occurs alongside Meta’s strong financial performance for the fourth quarter of 2024, during which it reported revenue of $48.39 billion, exceeding analysts’ forecasts.

Currently, the company is also dealing with backlash from performance-related layoffs, which affected around 3,600 employees. Some former workers allege they were let go despite having strong performance histories.

In previous statements, CEO Mark Zuckerberg emphasized that 2025 would be a critical year for Meta, with plans to invest between $60 billion and $65 billion in AI initiatives.

Major tech firms, including Amazon, Meta, Microsoft, and Alphabet, are ramping up their investments in AI, with a projected total of $320 billion in AI infrastructure by 2025. Amazon is expected to lead this charge with over $100 billion dedicated to AI.

Since reaching a low in 2022, Meta has made notable strides in stock performance. Over the past month, the stock has risen by 13.39%, 31.92% over six months, and 47.29% year-over-year. Year-to-date, gains stand at 15.95%.

Despite this impressive rally, Meta’s stock remains below the $1,000 threshold, though it is gaining traction. Analysts at Tigress Financial, UBS, and Citigroup have set an average price target of $833.67, suggesting a potential 20% increase from current prices.

The recent stock performance has sparked speculation that Meta might consider a stock split in 2025.

Stock Performance Snapshot: As of Thursday, Meta Platforms’ stock closed at $694.84, down 1.27% for the day. In after-hours trading, it dropped slightly further to $694.70, according to data from Benzinga Pro.

Image via Shutterstock

Look Ahead:

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.