Tesla has made a notable shift in its compensation policy this year, as managers informed some salaried employees that the company will not be offering merit-based equity awards.
This change, reported by Bloomberg, comes without a specific explanation from the company, but is believed to be a widespread move affecting various departments.
Traditionally, Tesla’s annual performance reviews included both salary adjustments and merit-based stock grants, in addition to existing equity. However, this year, even high-performing employees did not receive these merit-based grants. Employees at the end of their four-year vesting cycle were given stock “refreshers” to maintain competitive total compensation.
The decision raises questions about whether this is a temporary measure or indicative of a broader shift in Tesla’s compensation philosophy. Tesla, which employs around 140,000 people globally, has not responded to inquiries about this change.
CEO Elon Musk has consistently emphasized the significance of employee stock ownership in Tesla’s compensation strategy. This approach has been instrumental in keeping overall pay high while conserving cash. Musk has also credited it with deterring unionization efforts within the company.
Shares of Tesla have increased 128.62% year-to-date, and closed down 3.92% today at $247.14 per share.
