In a surprising turn of events, Meta has approved an incentive plan that could award executives with bonuses up to 200% of their base salary. This decision comes as the company plans to cut approximately 4,000 jobs, focusing on underperforming employees. CEO Mark Zuckerberg emphasized the need to streamline operations and invest in artificial intelligence. The new bonus structure aims to motivate executives by aligning their rewards with company achievements, signaling a shift towards performance-based compensation.

Redefining Executive Compensation: A Strategic Move

The newly approved bonus plan at Meta represents a significant shift in how the company compensates its top-tier employees. Instead of the previous cap of 75%, executives can now earn bonuses reaching up to twice their base pay. This change is designed to enhance motivation and focus on key business objectives. Importantly, this enhanced compensation package does not extend to CEO Mark Zuckerberg, whose remuneration typically includes stock options rather than cash incentives.

The rationale behind this generous bonus scheme is multifaceted. By offering substantial financial rewards, Meta seeks to ensure that its leadership remains committed to driving the company's strategic priorities forward. The increased variable cash incentives are intended to foster a culture of high performance and accountability among executives. This move underscores the company's commitment to rewarding those who contribute significantly to achieving organizational goals. Moreover, it reflects a broader trend in the tech industry where companies are increasingly tying executive pay to performance metrics.

Workforce Optimization and Performance Review

Simultaneously with the introduction of the new bonus plan, Meta is implementing workforce reductions aimed at improving overall efficiency. Approximately 5% of the company’s workforce, totaling nearly 4,000 employees, will be affected. These cuts target individuals deemed to be low performers, part of a broader strategy to streamline operations and allocate resources more effectively. CEO Mark Zuckerberg highlighted the importance of maintaining a high-performance culture, especially as the company intensifies its investments in AI technology.

Despite the clear criteria set by management, some laid-off employees have expressed surprise over their termination. Several workers mentioned receiving positive evaluations in recent performance reviews, indicating they were meeting or exceeding expectations. However, Meta maintains that past performance alone does not guarantee future alignment with the company’s evolving standards. The company emphasizes a goal-oriented culture where continuous high performance is expected. This approach ensures that only the most capable and aligned employees remain, fostering an environment conducive to innovation and growth.