Meta has approved a significant increase in the target bonus percentage for its annual executive bonus plan, just a week after initiating layoffs affecting 5% of its workforce. The decision, which excludes CEO Mark Zuckerberg, allows Meta’s named executive officers to earn bonuses up to 200% of their base salary, a substantial increase from the previous cap of 75%. This change reflects a broader trend of rising executive compensation within the company.
The committee for Meta's board of directors approved the new bonus structure on February 13. The committee aimed to ensure that the "target total cash compensation" for Meta executives aligns with that of peer companies. According to a corporate filing disclosed on Thursday, this adjustment positions executive compensation at approximately the 50th percentile of the Peer Group Target Cash Compensation. Previously, it was noted that this figure "was at or below the 15th percentile of the target total cash compensation of executives holding similar positions."
"Following this increase, the target total cash compensation for the named executive officers (other than the CEO) falls at approximately the 50th percentile of the Peer Group Target Cash Compensation."
The announcement comes at a time when Meta's financial performance has shown notable improvement. Over the past year, Meta's shares have risen by over 47%, closing on Thursday at $694.84. The company also reported a 21% increase in fourth-quarter revenue, reaching $48.39 billion year over year. Despite these gains, Meta has reduced its annual distribution of stock options by approximately 10% for thousands of employees, highlighting a shift in how compensation is being managed across different levels within the organization.
The revised bonus plan was made public as part of a broader disclosure in a corporate filing. This move underscores Meta’s strategy to enhance its competitiveness by aligning executive compensation with industry standards, despite recent workforce reductions. The company's decision to increase executive bonuses while simultaneously reducing stock option distributions indicates a nuanced approach to managing both short-term and long-term incentives.