Redefining Rewards: Meta Approves 200% Executive Bonuses

Meta approves bonuses of up to 200% of company executives...

Meta has approved a major increase in executive bonuses amid strong Q4 earnings and a recent cull of so-called "low performers." Meta has approved a plan that could see company executives earning bonuses of up to 200% of their salaries.

Details of the Bonus Plan

The company said in an SEC filing it was increasing its "target bonus percentage" for named executive officers from 75% of their base salary to 200% of it. The changes will take effect from the 2025 annual performance period and do not include the company's CEO, Mark Zuckerberg.

The filing mentioned that the "variable cash incentives" were meant to motivate executive officers to focus on company priorities and reward them for company results and achievements.

Reasoning Behind the Increase

The committee for Meta's board of directors stated that the increase came after a review of other companies in the tech sector. They noted that the company's total cash compensation of executives was below the 15th percentile of the target total cash compensation of executives holding similar positions at peer companies. The increase aims to place Meta executives' compensation at the 50th percentile of the peer group target cash compensation.

The approval for the percentage increase was granted on Feb. 13, 2025.

Response and Recent Events

Representatives for Meta did not immediately respond to requests for comments. The bonus increase follows Meta's recent decision to lay off around 5% of its workforce, approximately 3,600 employees. The company stated that the cuts were aimed at strengthening its operations, particularly after declaring 2025 as "an intense year" with plans to heavily invest in AI efforts.

Despite recent layoffs, Meta reported strong results in its Q4 2024 earnings, with revenue increasing 21% year-over-year to $48.4 billion, surpassing Wall Street expectations. The company attributed this growth to its advertising business and AI-driven product improvements. Zuckerberg has also outlined ambitious plans for Meta's AI assistant to become the most widely used in the industry in 2025.

Other tech companies, like Microsoft, are also targeting underachieving employees in a fresh round of cuts, marking a shift from past layoffs primarily driven by cost-cutting reasons. The labeling of employees as "low performers" has raised concerns about subjectivity and fairness.

For more details, the original article can be found on Fortune.com.