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Opinion
Chris Bryant

Tech Shares Are Crashing, So Kiss Your Bonus Goodbye

Tumbling tech valuations imperil employee retention and corporate cash flows.

Should I stay or should I go?

Should I stay or should I go?

Photographer: Maurice Tsai

The plunge in technology shares is providing investors with a harsh lesson in the reflexivity of stock-based compensation, which acts as a tailwind for companies while stock prices are increasing but can hamper employee retention and threaten cash flow when share prices collapse.

Loss-making mobile-games company Skillz Inc., for example, in September promised chief executive Andrew Paradise a bonus worth roughly $175 million if he could reverse a steep decline in the share price and quintuple the market value within seven years.