The AI Boom Is Keeping Employees Well Paid, however They Can’t Go Anywhere | Invesloan.com

Welcome back to our Sunday edition, where we round up some of our top stories and take you inside our newsroom. It’s gotta be the shoes! Why else would people be willing to drop at least $1,100 on a pair of sneakers? I’d never shell out that much but I am tempted to go try on Wall Street’s favorite pair of kicks.

On the agenda today:

But first: Are you leaving the money on the table?

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This week’s dispatch

Golden handcuffed

Imagine you work for a company and your stock price has just skyrocketed. Think Nvidia, up more than 1,100% over the past few years to become a $4.5 trillion company. Or Broadcom and AMD, two other chipmakers whose shares are surging in the AI boom.

Employees of these companies must be feeling pretty good right about now. What could possibly go wrong?

As is often the case, though, there is a catch. In this instance, it’s known as “golden handcuffs” — the notion of feeling stuck because it’s too risky or expensive to move or change.

These compensation packages often include restricted stock units, or RSUs. Those who decide to leave their companies could forfeit any unvested stock, meaning they could miss out on a substantial form of compensation — potentially worth millions of dollars.

My colleagues Geoff Weiss, Hugh Langley, and Rosalie Chan wrote this weekend about the latest golden handcuff trend sweeping through Silicon Valley, particularly at the AI chip companies.

In one case, they reported that an equity package of $420,000 given to an Nvidia employee in 2023 is worth almost $2 million today, citing data from Levels.fyi. Even a more modest $66,000 RSU package reported by a Broadcom employee in 2023 has jumped in value to around $267,000.

Stock payouts unlock over time. Quitting before shares vest can potentially mean leaving a substantial amount of money on the table.

Although, it’s worth noting that if you quit or lose your job, those unvested RSUs disappear.

Companies use restricted stock as a retention tactic. It’s one that has been utilized from Wall Street to Big Tech, with a similar dynamic now occurring in the AI boom.

Consider the employee churn rates at these chipmakers. Nvidia said in its annual sustainability report that its turnover rate has been cut in half over the past few years, adding that “RSUs promote retention.” Nvidia CEO Jensen Huang has boasted about making employees wealthy.

Similarly, Broadcom said its global voluntary attrition rate last year was 6.2%, which is “below the technology industry benchmark.” It cited equity awards as a “powerful long-term retention incentive.” This is the conundrum for chipmaker employees right now. Walk away and forfeit millions for a new opportunity? Or stay?

There’s a new thought leader in town

For the last 20 years, Mark Zuckerberg has been the world’s Minister of Thought. Starting with Facebook, the Meta CEO has transformed how we view ourselves and each other.

Now, Zuckerberg appears to be ceding that title to OpenAI’s Sam Altman. ChatGPT is only three years old and has more than 800 million weekly users — about 40 times more than Facebook’s audience during its first three years. If the past two decades were about curating who we are, the future may be about creating who we want to be.

From pokes to prompts.

The man behind Beyond

Dimitri Semenikhin is the 29-year-old day trader whose thesis helped spark a massive rally in Beyond Meat.

The day trader is a Moscow native who lived in Monaco and was schooled in London. He previously launched a luxury travel startup called Yacht Harbour, and is currently the CEO of his family’s real-estate development firm.

And while he’s leaned into it at times, he said he’s not Roaring Kitty 2.0.

What makes Semenikhin and Beyond different.

The AI divide at EA

At the video-game giant Electronic Arts, management is gung-ho on AI. Workers, on the other hand, say AI is actually making their jobs harder — and they fear it could be game over if they’re training their replacement.

AI has been a part of video games for some time: when you play “Madden” you’re competing against a computer-controlled team, for instance. But the modern AI affecting game design is different, and it’s widening the gap between bosses and employees.

Player v. player.

Also read:

Loyalty > Pay

When push comes to shove, would you want a higher salary or a more loyal employer? After Aki Ito’s story on the death of workplace loyalty, Dan DeFrancesco asked newsletter readers that very question. Of the 170 people who responded, nearly twice as many chose loyalty over money.

The poll’s result confirmed something Aki has heard in her conversations with white-collar professionals before: the desire for a workplace built on mutual care runs so deep that people would trade real money for it.

Make corporate America loyal again.

Also read:

This week’s quote:

“Somebody decided, ‘I’m gonna sell,’ or whatever the case may be, and it just triggered profit taking.”

— Peter Perkins, a global strategy partner at MRB Partners, on gold’s pullback.

How a pistachio gold mine grew out of California

The state is now the world’s top supplier of pistachios. As the Dubai chocolate trend fuels demand and California’s drought intensifies, growers are fighting to keep up.

More of this week’s top reads:

The BI Today team: Steve Russolillo, chief news editor, in New York. Dan DeFrancesco, deputy editor and anchor, in New York. Akin Oyedele, deputy editor, in New York. Grace Lett, editor, in New York. Amanda Yen, associate editor, in New York.