The AI ​​boom keeps employees well paid, but they can’t go anywhere

Welcome to our Sunday edition, where we round up some of our biggest stories and take you inside our newsroom. It is i have to be the shoes! Why else would people be willing to spend at least $1,100 on a pair of sneakers? I’d never spend that much, but I’m tempted to try out Wall Street’s favorite pair of sneakers.

On the program today:

But first: Are you leaving money on the table?

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This week’s shipment

Golden handcuffs

Imagine you work for a company and your stock price has just skyrocketed. Consider Nvidia, rising more than 1,100% in recent years to become a $4.5 trillion company. Or Broadcom and AMD, two other chipmakers whose stocks are soaring in the AI ​​boom.

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

But as is often the case, there is a catch. In this case, we’re talking about “golden handcuffs” – the notion of feeling stuck because it’s too risky or too expensive to move or change.

These compensation programs often include restricted stock units, or RSUs. Those who decide to leave their company could lose any unvested shares, 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 Silicon Valley, particularly among AI chipmakers.

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

Share payments unlock over time. Resigning before the shares vest can potentially mean leaving a substantial amount of money on the table.

However, it should be noted that if you leave or lose your job, these unvested RSUs disappear.

Companies use restricted stock as a retention tactic. It’s a method that has been used from Wall Street to big tech, with similar dynamics now occurring in the AI ​​boom.

Consider employee churn rates at these chipmakers. Nvidia said in its annual sustainability report that its turnover rate had been cut in half in recent years, adding that “RSUs drive retention.” Nvidia CEO Jensen Huang bragged about making his employees rich.

Similarly, Broadcom said its global voluntary attrition rate last year was 6.2%, which is “below the technology sector benchmark.” He cited stock awards as “a powerful incentive for long-term retention.” This is the dilemma facing chipmaker employees right now. Walk away and lose millions for a new opportunity? Where to stay?

There’s a new thought leader in town

For 20 years, Mark Zuckerberg has been the world’s Minister of Thought. Starting with Facebook, Meta’s CEO transformed the way 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 in its first three years. If the last two decades were about defining who we are, the future might be about creating who we want to be.

From nudges to prompts.

The man behind Beyond

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

The day trader is from Moscow, lived in Monaco and studied in London. He previously launched a luxury travel startup called Yacht Harbor and is currently CEO of his family’s real estate development company.

And while he sometimes leaned into it, he said he wasn’t Roaring Kitty 2.0.

What differentiates Semenikhin and Beyond.

The AI ​​divide at EA

At video game giant Electronic Arts, management is enthusiastic about AI. Workers, for their part, say AI makes their jobs harder — and they fear it’s game over if they train their replacement.

AI has been a part of video games for some time: when you play “Madden”, for example, you face a computer-controlled team. But modern AI affecting game design is different and widens the gap between bosses and employees.

Player versus player.

Also read:

Loyalty > Salary

Ultimately, would you want a higher salary or a more loyal employer? After Aki Ito’s story about the death of workplace loyalty, Dan DeFrancesco asked this same question of newsletter readers. Of the 170 people who responded, nearly twice as many chose loyalty over money.

The poll result confirmed something Aki has heard before in her conversations with white-collar workers: The desire for a workplace built on caring is so deep that people would trade real money for it.

Making American Businesses Loyal Again.

Also read:

This week’s quote:

“Someone decided, ‘I’m going to sell,’ or whatever, and that just triggered profit-taking.”

— Peter Perkins, global strategic partner at MRB Partners, on gold’s decline.

How a pistachio gold mine was born in California

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

More top reads this week:

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