OpenAI is leading the tech startup scene with unprecedented employee compensation, offering an average of $1.5 million in stock-based payments per worker, significantly impacting projected revenue. This compensation level, more than seven times Google’s pre-IPO payout, is crucial for attracting and retaining top AI talent amid intense competition. The annual stock-based compensation is anticipated to reach $3 billion by 2030, reflecting OpenAI’s aggressive strategy to counteract poaching efforts, particularly after Meta’s hiring spree drew away key personnel.
To enhance retention, OpenAI has eliminated its six-month vesting policy, allowing quicker access to substantial stock awards. Historically, major tech firms allocate about 6% of revenue to stock compensation; however, OpenAI’s figures soar to around 46% of projected revenue by 2025. Originally a nonprofit, OpenAI evolved into a capped-profit model in 2019 to sustain its extensive AI research funding requirements while retaining significant control through its nonprofit foundation.
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