AI competition breeds 'gold handcuffs': Meta (META.US) issues executive stock options for the first time in 14 years. The highest exercise price needs to increase by six times to unlock.

Meta Platforms Inc. (META.US) is offering stock options to executives for the first time, marking the first time since its IPO in 2012. This move is aimed at retaining and incentivizing executives as the company continues to heavily invest to stay competitive in the intense AI competition. According to company documents submitted on Tuesday, these new options will gradually vest over the next few years as Meta's stock price reaches ambitious targets. A Meta spokesperson stated that these options are targeted towards executives and other senior leaders directly responsible for the company's most critical and strategic businesses. The first batch of options will unlock when Meta's stock price reaches $1116.08 per share, an 88% increase from the current level. Meta's stock price closed at $592.92 on Tuesday in the New York market. Subsequent batches are tied to more challenging targets, with the highest exercise price reaching $3727.12, more than six times the current stock price. Regardless of Meta's stock performance, all options will be granted to executives no later than August 2030, and if not exercised by then, will expire five years later. A spokesperson confirmed that CEO Mark Zuckerberg is not included in this round of option grants. In a statement, a Meta spokesperson said, "This is a big bet. These compensation plans will only pay out if Meta achieves significant future success that benefits all shareholders. Like all stock options, they only have value when the stock price significantly exceeds the exercise price, which must be realized within an extremely aggressive five-year timeline in this case." Meta has been actively investing to compete with rivals like OpenAI and Alphabet Inc. Class C in the rapidly evolving AI competition. A significant amount of investment has been made in AI-related talent. Some tech companies, including Meta, are offering compensation plans worth hundreds of millions of dollars to AI researchers and executives. A spokesperson mentioned that introducing stock options is to a certain extent aimed at helping Meta retain top talent.