Tesla, the auto major, has decided not to grant merit-based stocks to its employees, as was the usual annual practice till now. As part of the yearly performance assessments or reviews, Tesla employees usually witnessed adjustments in their salaries and looked forward to stock awards, based on merit.
As reported by Bloomberg, this year, the automaker has decided not to grant merit-based stocks, which could be a step towards overhauling its compensation strategy. However, no official statement has been received in this regard. It is assumed that this decision is based on a need to cut costs amidst the challenging macroeconomic environment.
Tesla had always believed in granting stocks as a way of cash conservation while simultaneously ensuring high pay in total. This has also managed to curb unionisation efforts at the firm as believed by Elon Musk, CEO, Tesla.
However, it is reported that employees have received reasonable hikes to handle the rise in living costs and significant adjustment have been made to their basic salaries.
Employees who were at the end of their vesting period were granted stock refreshers so that their overall compensation remained competitive.
This deviation from the norm does come as a surprise because Tesla is known to draw talent because of its equity awards and compensation strategy. Tesla staff members receive compensation that comprises of basic salary as well as stock awards, and these stocks vest over a period of four years.