Meta’s Compensation Strategy Shifts: Bigger Bonuses for Executives, Reduced Stock for Staff

In a significant change in its compensation strategy, Meta has approved the executive bonuses of up to 200% on the base salaries in the SEC filing done on Thursday, February 20th, 2025. This decision refers to the company’s ongoing efforts to align its financial structure and encourage top management as it navigates through a period of trimmed and heavy investment in AI.

According to Yahoo Finance, the company said in the filing that the bonus plan provides “variable cash incentives” designed to “motivate its executive officers to focus on company priorities and to reward them for company results and achievements.” The tech giant also added that this would increase the bonus package to 200% from 75%.

Meta recently reduced the value of the annual equity refreshers for some employees by about 10%, according to two sources. This change means that some employees will receive about 10% less in restricted stock units (RSU) in each quarter this year, including units in a period of four years.

Boosting Executive Compensation

Approving executive bonuses of as much as 200% for the Meta’s top leaders would probably be a strategic move. In rewarding senior management with fat bonuses, Meta wants to hold onto its leadership team and see that its top players are focused on the company’s long-term growth agenda. The new bonuses are proof of the increasing investor faith in the thriving Meta platforms in 2025 capacity to grow through AI as other tech struggled to find a footing.

While Meta has opted to increase executives’ bonuses, it has reduced the stock awards of employees, something that has generated some unease among the employees. The trimming of stock options, one of the most important benefits for many workers, is considered a cost-savings move by Meta as it seeks to redirect its financial resources to its best-looking initiatives, such as investments in Meta AI. These investments see Meta at the forefront of the AI arena, with the firm heavily investing in AI-based initiatives like virtual reality (VR), augmented reality (AR), and sophisticated machine learning technologies.

Impact of Meta’s Layoffs

Meta layoffs have contributed to the increasing pressure on the company’s reputation and morale. Although some employees are unhappy with the alteration of their stock options, others realize that these measures are part of a broader restructuring process. As the company focuses more on AI and its core platforms, it is looking to develop a more streamlined operation that is well set up for future growth. Though, Zuckerberg said that these layoffs were due to low performance as the company looks to streamline its operations. In January Meta’s share prices surged as Zuckerberg predicted a breakthrough year.

The context of the compensation strategy of the Meta, recent changes reflect a change towards a more performing-based model, where senior authorities are long-term rewarded for the success of the company. In an internal memorandum last month, Zuckerberg said that Meta planned to recreate these positions this year. The company is now expediting working for machine-learning engineers and fast-tracking recruitment efforts in February and March.