Meta(META.US) Shares Reach Record Highs, Employee Stock Options "Discounted"

Despite hitting a record high this month, Meta Platforms (META.US) is cutting the annual stock option grants for tens of thousands of employees by about 10%, according to reports from overseas media on Thursday.

Employees are granted stock options annually, which form a major part of their compensation along with base salaries and annual bonuses. The stock options accumulate every three months and vest over a four-year period.

According to reports from overseas media, most employees were told that their stock options this year would be reduced by about 10%.

The reports also noted that the specific cut would depend on the region and level of the employee.

Moreover, Meta said in a regulatory filing on Thursday that it had approved a new plan to increase the target bonus for executives from 75% of their base salary to 200%.

The company said in the filing to the U.S. Securities and Exchange Commission that the updated bonus plan would not apply to Mark Zuckerberg, the company's chief executive.

In January, the parent company of Facebook said it would cut about 5% of its "lowest performing" employees and planned to hire people to fill those positions this year.

Zuckerberg also warned employees that there would be more similar layoffs this year to "raise the bar" on performance management.

Despite a Donald Trump presidential executive order delaying the ban, the social media giant's stock has been on a winning streak since the U.S. Supreme Court upheld the ban on TikTok in the U.S. on January 17.

The stock rose in January after CEO Mark Zuckerberg said Meta planned to invest up to $65 billion this year to expand its artificial intelligence infrastructure.

Meta's stock fell 1.3% to close at $694.8 on Thursday. As of writing, the stock was up 0.60% to $699 in premarket trading.

The company's fourth-quarter revenue exceeded Wall Street expectations at the end of last month, but it said its sales in the current quarter (first quarter) may not meet expectations, raising doubts about whether its investment in expensive AI tools will pay off.