Zoom to Cut Back on Stock-Based Compensation, Joining Salesforce, Workday
- Equity awards are ‘not sustainable,’ CEO Yuan writes in memo
- Tech investors and executives concerned about share dilution
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Zoom Video Communications Inc. is reducing the practice of paying workers with company stock, joining peers such as Salesforce Inc. and Workday Inc. in limiting their reliance on a common compensation technique in the tech industry.
Equity in Zoom has been issued to workers at a rate that is “not sustainable,” Chief Executive Officer Eric Yuan wrote this week in a note to employees. “We grant a significant amount of shares each year that has led to very high dilution. Put simply, we are granting too much equity and must proactively reduce it.”