Meta disclosed in SEC filings on Tuesday that it had granted stock options to six of its most senior executives, the first such awards since the company’s 2012 IPO. Hours later, it laid off approximately 700 employees across Reality Labs, recruiting, sales, and Facebook. The options are worthless unless Meta’s market capitalisation reaches $9 trillion by March 2031, roughly six times its current valuation of approximately $1.5 trillion. If it does, four of the six executives stand to earn up to $921 million each.

The juxtaposition was not subtle, and it was not lost on employees. Meta’s own workforce has spent the past two years absorbing successive rounds of cuts, reduced stock compensation for rank-and-file staff, and a corporate message that emphasises efficiency and performance above all else. The executive option grants tell a different story: one in which the company’s leadership is being incentivised to pursue a growth target so ambitious that achieving it would make Meta the most valuable company in history by a considerable margin.

The structure of the awards

The six recipients are Andrew Bosworth, the chief technology officer; Chris Cox, the chief product officer; Javier Olivan, the chief operating officer; Susan Li, the chief financial officer; Jennifer Newstead, the chief legal officer; and Naomi Gleit, the head of product. According to an Equilar analysis published by The New York Times, Bosworth, Cox, and Olivan could each receive up to $921 million if all tranches vest. Li’s package is valued at up to $161 million. Mark Zuckerberg, who controls the company through his supervoting shares, is not included.

The options vest in tranches tied to share price thresholds. The first tranche requires Meta’s stock to reach $1,116.08, roughly double its current price. The final tranche requires $3,727.12, which corresponds to the $9 trillion market capitalisation target. All options expire in March 2031, giving the executives five years to hit the targets. If the stock never reaches the first threshold, the awards pay nothing.

Meta has framed the grants as retention tools, and that framing is not entirely implausible. The AI talent market has reached extraordinary levels: Meta itself has reportedly offered packages worth up to $300 million over four years to retain top AI researchers, according to Fortune and TechCrunch. OpenAI, Google DeepMind, and Anthropic are all competing for the same pool of senior technical and executive talent. Losing a CTO or CPO to a rival during a period of intense AI investment would be costly.

The cost structure behind the target

Reaching a $9 trillion valuation would require Meta to grow at a compound annual rate of roughly 35 per cent over five years. For context, Apple, the current most valuable public company, is worth approximately $3.5 trillion. No company has ever reached $9 trillion. Meta would need to more than double Apple’s current valuation.

The path to that target runs through artificial intelligence. Meta has committed to capital expenditure of $115 billion to $135 billion in 2026, a roughly 75 per cent increase over the prior year, nearly all of it directed at AI infrastructure: data centres, custom chips, and the compute required to train and serve its models. The company is betting that AI will transform its advertising business, power new products in augmented and virtual reality, and generate entirely new revenue streams that do not yet exist.

That bet comes at a cost that is already visible in the company’s financials. In 2025, Meta’s cash costs related to employee stock-based compensation reached approximately $42 billion, consuming roughly 96 per cent of its $43.6 billion in free cash flow. Stock-based compensation is a non-cash expense on the income statement, but the dilution it creates and the cash costs associated with tax withholding and buybacks to offset dilution are real. When a company’s stock awards consume nearly all of its free cash flow, the margin for error on its growth projections narrows considerably.

The two-tier workforce

The executive option grants were disclosed against a backdrop that makes them politically difficult to defend. Meta cut stock-based compensation for rank-and-file employees by five per cent in 2025, following a 10 per cent cut the previous year. The 700 layoffs announced on the same day as the option filings were the second round of cuts this year. And the company’s broader restructuring over the past three years has eliminated more than 20,000 positions.

The message to employees is clear, even if Meta would not phrase it this way: the company’s most valuable asset is its senior leadership, and it is willing to pay whatever is necessary to retain them. Everyone else is a variable cost to be optimised. This is not an unusual position for a large technology company to take, but it is rarely stated as plainly as Meta stated it on Tuesday.

The comparison to Tesla is instructive. Elon Musk’s 2018 compensation package, originally valued at $56 billion and tied to market capitalisation milestones, was rescinded twice by a Delaware court before Tesla’s board awarded him a separate $29 billion interim package in 2025. The legal and governance battles over Musk’s pay consumed years of board attention and shareholder goodwill. Meta’s option structure is smaller in absolute terms but similar in design: tie executive wealth to a valuation target so large that achieving it would justify nearly any payout.

Whether the $9 trillion target is a serious strategic objective or an aspirational figure designed to make the option grants appear performance-based rather than gratuitous is a question only time will answer. What is already clear is that Meta has chosen to make its largest executive compensation commitment in over a decade during the same week it told 700 employees their roles were no longer necessary. The company’s leadership appears to believe that the tension between those two decisions is a price worth paying for the talent it wants to keep. The employees who were let go might reasonably disagree.