Meta offers stock options to ‘retain, compensate’ top execs for first time since IPO as AI race heats up

Meta Platforms Inc. is offering stock options to top executives for the first time since its 2012 IPO; it’s an effort to retain and compensate executives as the company continues to spend aggressively to compete in the heated artificial intelligence race.

The new options, outlined in company filings Tuesday, will be announced if Meta hits ambitious stock price milestones in the coming years. A Meta spokesman said they were offered to senior executives and other senior leaders who are directly responsible for the company’s most important and strategic bets.

The first tranche of options will open if Meta shares reach $1,116.08 per share; This is a jump of 88% above the current level. Meta shares closed at $592.92 in New York on Tuesday.

Additional tranches are tied to more aggressive targets; that range goes as high as $3,727.12, more than six times the current price. All options will be vested in executives by August 2030, regardless of Meta’s stock performance, and will expire in five years if not exercised.

A spokesperson confirmed Chief Executive Mark Zuckerberg was not given the option.

“This is a big bet,” a Meta spokesperson said in a statement. “These compensation packages will not be implemented unless Meta achieves great success in the future, benefiting all our shareholders. As with all stock options, there is value only if the share price meaningfully exceeds the strike price, in which case it should be on an extremely aggressive 5-year timeline.”

Meta has been spending aggressively to compete in the rapidly evolving artificial intelligence race against rivals such as OpenAI and Alphabet Inc.’s Google. Most of these went to AI-related capabilities. Some tech companies, including Meta, offer compensation packages exceeding hundreds of millions of dollars to AI researchers and executives. Stock options were added in part to help Meta retain its top talent, a spokesman said.