The board granted the awards to a deliberately selective group that Meta believes is critical to its AI ambitions. The aggressive strike prices on the options signal that Meta sees AI as a massive opportunity and that the market for talent in AI has intensified to the point Meta needed to level up its compensation plan.
Ken Mahoney, CEO of retirement planning and investment firm Mahoney Asset Management, said in a note that the stock option awards are linked to “extreme upside scenarios into the future, such as if Meta were to become the most valuable company of all time, which would have to surpass some of the other tech giants.”
“These are good moves for talent retention, and they cost nothing upfront,” wrote Mahoney. “It is a good way to align some incentives with moonshot outcomes, but we have to remember this $9.46 trillion number is more than a 5x of current valuations, and realistically, it’s not something that would play out any time soon. Of course, they know this too.”
Meta is also contending with an order this week to unwind its $2 billion acquisition of Manus, a Chinese-founded AI startup that had relocated to Singapore. The move will be a logistical headache, given that Manus employees have already joined Meta’s AI team and early investors have all cashed out.
Mahoney said that ongoing uncertainty over Meta’s return on investment from its massive capital expenditures will be top of mind for some investors.
“This is what the market keeps getting hung up on, and we think if they guide capex higher than what is estimated, then it could be an issue for the stock’s reaction,” Mahoney wrote.
Analysts expect Meta to report Q1 revenue near $55.5 billion, up roughly 31% year-over-year, and in the middle of the $53.5 billion to $56.5 billion range that the company guided to. Analyst expect earnings of $6.68 per share, according to AlphaSense Visible Alpha.
