TLDRs:
- Meta trims employee stock awards for the second straight year.
- Capital expenditure rises sharply as AI and data centers expand.
- Top performers see higher incentives despite broad equity reductions.
- Employee reactions mixed amid strong pay and tight tech labor market.
Meta Platforms (NASDAQ: META) has reportedly reduced its annual stock awards for most employees by approximately 5% for the second consecutive year.
The move follows a roughly 10% cut last year, according to sources familiar with the matter. While the adjustment is modest, it signals a broader shift in how Meta is structuring compensation as it navigates heavy investments in next-generation technologies.
The reductions are part of a strategic effort to manage costs while funding Meta’s ambitious expansion into artificial intelligence (AI) and data center infrastructure. Although Meta has declined to comment on the specifics, internal and external observers note that the cuts align with a growing trend among tech giants to redistribute equity more selectively.
Record Capital Spending Drives Strategy
Meta’s capital expenditures for 2026 are projected to reach between $115 billion and $135 billion, a significant increase from the $69.7 billion spent on property and equipment in fiscal year 2025. The bulk of this spending is earmarked for AI infrastructure, including expansive data center development, signaling the company’s commitment to building the backbone for its future growth.
While investors have raised concerns about potential margin compression, especially following the $19.2 billion operating loss reported by Reality Labs in 2025, the company appears willing to trade near-term profitability for long-term technological leadership. In this context, tightening broad stock awards helps Meta balance cost control with its massive capital outlay.
Performance-Based Rewards Take Priority
Despite broad reductions in equity, Meta is increasing incentives for top performers. The company has adjusted its performance review system to allocate larger awards to employees who demonstrate exceptional contributions, particularly those building AI systems. This has effectively raised the overall compensation budget, ensuring that key talent remains motivated and engaged.
Meta’s approach reflects a growing trend in the tech sector, rewarding high-impact contributors rather than distributing stock grants broadly. By concentrating rewards on elite engineers, the company aims to accelerate innovation in AI while managing labor costs more efficiently.
Employee Reactions Mixed
Employee sentiment around the changes has been varied. Some workers expressed frustration on anonymous forums about the cuts, while others indicated they are unlikely to leave due to competitive pay levels and a tight job market in tech. Analysts note that while equity reductions may stir short-term dissatisfaction, the retention of top talent is being safeguarded through targeted rewards.
The equity adjustments come amid broader industry-wide shifts, as big tech companies compete for scarce AI talent. Competitors are also concentrating stock awards and bonuses on elite engineers, widening pay gaps but intensifying the fight for specialized skills. Meta’s strategy appears to reflect both internal priorities and market realities, balancing the need for cost control with the urgency of attracting and retaining top-tier AI talent.
Conclusion
Meta’s slight dip in stock price following the announcement highlights investor attention to compensation trends alongside massive capital investments. By cutting broad stock grants while enhancing incentives for high performers, Meta aims to maintain its competitive edge in AI and data center development without compromising its financial discipline.
As the company continues to navigate record spending and rising competition for talent, its compensation strategy may set a precedent for how other tech giants structure rewards in the AI era.
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