Meta Cuts Employee RSUs to Fund AI Spending
Meta has reduced Restricted Stock Unit (RSU) grants for employees as part of a strategic tradeoff to fund a significant increase in AI-related expenditures. The move signals a corporate bet on future AI-driven growth at the expense of current equity compensation levels. This action requires HR and finance teams to manage employee expectations and communicate the rationale behind the shift in total rewards strategy.
- This is the second consecutive year Meta has reduced equity compensation; the current 5% cut to the annual stock award allocation follows a more significant 10% reduction in the previous year. - The company plans to spend between $115 billion and $135 billion in 2026, primarily on AI infrastructure, as part of a broader commitment to invest over $600 billion in US-based AI data centers and technology by 2028. - CEO Mark Zuckerberg has stated that the risk of underinvesting and falling behind in AI is greater than the risk of misspending billions, comparing the current AI investment surge to past infrastructure build-outs like the dot-com era. - While the RSU cuts are broad, employees in high-priority AI divisions are less affected than those in "legacy" departments like the core Facebook app and non-AI advertising products. - To attract top-tier AI researchers, Meta has offered compensation packages reaching as high as $200 million over four years, signaling a strategy of targeted, aggressive spending on specialized talent. - The compensation strategy shift coincides with a new performance management system set for 2026, where employee evaluations, bonuses, and promotions will be formally tied to their demonstrated "AI-driven impact." - Despite the reduction in broad-based stock awards, Meta's overall compensation budget has reportedly increased, with a new performance review structure designed to provide larger rewards to top performers. - The spending pivot is also linked to broader restructuring, including laying off 10% of the staff in its Reality Labs division, which has accumulated over $83 billion in losses since 2020.
