Over the past few years, the list of the world's most valuable companies has been dominated by big tech. Many of the top names are companies are at the forefront of the artificial intelligence (AI) revolution. Since the dawn of AI in early 2023, Meta Platforms (META 0.56%) has been a standout performer, with its stock gaining 381% (as of this writing), more than four times the 72% return of the S&P 500.
However, the social media titan is looking ahead to the next five years and has unveiled ambitious plans to increase its market cap to $9 trillion by 2031, according to a report in The Wall Street Journal.
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Show me the money
Meta is offering its top executives generous pay incentives if the company can grow its value more than fivefold in as many years. To that end, Meta developed a stock option plan that could net its senior executives billions of dollars to achieve this audacious goal.
Under the terms of the plan, top execs would only receive the full value of their options if Meta Platforms' stock price climbs to $3,727, pushing its market capitalization to $9 trillion by 2031, according to the report. For those keeping track at home, that's a 500% increase compared to its value when the market closed on Tuesday. For the lowest tier of the plan to kick in, Meta's stock price would need to climb at least 88% to more than $1,116.
The executives included in the compensation plan are Chief Technology Officer Andrew Bosworth, Chief Product Officer Chris Cox, Chief Operation Officer Javier Olivan, Chief Financial Officer Susan Li, Chief Legal Officer C.J. Mahoney, and Vice Board Chair Dina Powell McCormick. CEO Mark Zuckerberg is not included in the plan.
NASDAQ: META
Key Data Points
The two-tiered system would reward Bosworth, Cox, Li, and Olivan the most, resulting in windfalls of as much a $2.7 billion, though much would depend on the stock price at the time the executives chose to exercise their options.
A spokesperson for Meta confirmed the plan, highlighting the ambitious nature of the undertaking. "This is a big bet. These pay packages will not be realized unless Meta achieves massive future success, benefiting all of our shareholders," the spokesman said. "As with all stock options, there is only value if the share price meaningfully exceeds the exercise price, and in this case, it must be on an exceedingly aggressive five-year timeline."
Meta's stock has stagnated, essentially flat over the past year, as several missteps with the latest version of its Llama AI have cast a shadow over the company's AI ambitions. On the other hand, Meta's financial results were solid, with revenue of $59.9 billion jumping 24% and diluted earnings per share of $8.88 climbing 11%.
Moreover, at 25 times earnings, Meta is one of the best AI stocks for the money, offering a compelling entry price for investors while the company works to reach its ambitious goal.
