OpenAI Is Paying Employees More Than Any Major Tech Startup in History
- Reference: 0180493403
- News link: https://slashdot.org/story/25/12/31/204215/openai-is-paying-employees-more-than-any-major-tech-startup-in-history
- Source link:
> To keep its lead in the AI race, OpenAI is doling out massive stock compensation packages to top researchers and engineers, making them some of the richest employees in Silicon Valley. The equity awards are inflating the company's heavy operating losses and diluting existing shareholders at a rapid clip. As an AI arms race intensified this summer, frontier labs such as OpenAI faced pressure to increase employee pay after Meta Platforms Chief Executive Mark Zuckerberg began offering pay packages worth hundreds of millions of dollars -- and in some rare cases $1 billion -- to top executives and researchers at rival companies.
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> Zuckerberg's recruiting blitz swept up 20-plus OpenAI personnel, including ChatGPT co-creator Shengjia Zhao. In August, OpenAI gave some of its research and engineering staff a one-time bonus, with some employees receiving millions of dollars, The Wall Street Journal previously reported. The financial data, shared with investors over the summer, shows that OpenAI's stock-based compensation was expected to increase by about $3 billion annually through 2030. The company recently told staff it would discontinue a policy that required employees to work at OpenAI for at least six months before their equity vests. That development could lead to further compensation increases.
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> OpenAI's compensation as a percentage of revenue was set to reach 46% in 2025, the highest of any of the 18 companies except for Rivian, which didn't generate revenue the year before its IPO. Palantir's stock-based compensation equaled 33% of its revenue the year before its IPO in 2020, Google's was 15% and Facebook's was 6%, the analysis shows. On average, each company's stock-based compensation made up about 6% of revenue among tech companies the Journal analyzed in the year before their IPOs, according to the Equilar data.
[1] https://www.wsj.com/tech/ai/openai-is-paying-employees-more-than-any-major-tech-startup-in-history-23472527
Stock money isn't real (Score:2)
It's great that the people are being payed well, but as with other stock-based arrangements this only counts if it's immediately vested and can be sold. Even then if they all try to cash in it will lose most of its value.
Re: Stock money isn't real (Score:2)
On the flip side, if you don't cash out, your shares could be worth 10x more in a few years.
1.5 Million (Score:2)
The minimum price you need to pay people to help you screw up society.
They'll get 0 in the end (Score:3)
They can't sell those stock options on the open market. It's unlikely they are allowed to sell them at all right now. Even if they go IPO, they will likely be locked in for a significant period. And given the rate the company is burning money, it's highly unlikely to fetch anything near it's last valuation when it does go public. It's likely to fetch a fraction of that (and just going bankrupt is a distinct possibility). So yeah, when you're paying monopoly money you can give really high numbers. In the end, they will likely have made more working at any non-startup big tech company.
Re: (Score:2)
This. Stock options are zip until they're liquid. People learn this lesson in every startup boom.
Which isn't to say they might not be worth millions... but their valuations now are basically fiction.
Re: They'll get 0 in the end (Score:2)
They can sell them if they choose to, and I'm sure they can find a buyer, possibly even above the current FMV, but there are consequences, typically in the form of losing their eligibility to receive anymore shares.
Re: (Score:2)
Usually not. They'd have to wait a few years, while remaining continuously employed, before being able to deliver the shares that they "sold" early. And due to clawback provisions, those shares would have a tendency to *poof* in a haze of smoke well before then if the company found out that they had been "sold" in advance.
Personally, I wouldn't pay 10c to the dollar to someone offering their shares in advance....
Cash em quick (Score:1)
Cash those paychecks quickly, and don't count on much after March...
34 times? (Score:1)
"The $1.5 million is about 34 times the average employee compensation of 18 other large tech companies in the year before they went public."
So the others are getting $44k? Jeezuz.
Re: (Score:2)
No, that's just the average - I'd say about half get less than that.
-maths
Average vs median (Score:1)
There's a comment under the WSJ article I find worth repeating. WSJ user @LouisLin574 wrote: "They never talk about the fact that the vast majority of the stock grants go to the top executives. See how they say average not median. This is purely a recruiting tool and free PR hype. And all that stock can be worthless. It is just theoretical value at current arbitrary valuation."
to be valuable (Score:2)
Yes OpenAI may be one of the pinnacles of employment compensation at present, but I'm thinking there is very good pay in the entire AI creation industry these days. There's a lot more to it than crafting the architecture for the best LLM, there will be spinoff skillsets that pay very good money. The companies that generate training data for the AI companies are getting paid a huge amount of actual money. Come up with an original idea, it could be you.
[1]https://www.techbuzz.ai/articl... [techbuzz.ai]
[1] https://www.techbuzz.ai/articles/meet-the-billionaires-selling-ai-its-training-data
Hardly surprising (Score:3)
They've been given more money than any project I've ever known of especially given the lack of profit. Want the best you have to pay the best.
Re: (Score:2)
> Want the best you have to pay the best.
That's why they get regularly trounced by competitors.
The best like to sit on their arse counting money. The second best are more hungry and less lazy.
Re: Hardly surprising (Score:2)
The best are rarely the best at their jobs just the best at marketing themselves.