Big Tech's 'golden handcuffs' have become 'silicon handcuffs'

"A few years ago, FAANG engineers were famously "locked in" by massive equity windfalls. Today, the same dynamic is playing out with AI chipmakers. According to Levels.fyi data, engineers at AMD, Broadcom, and Nvidia are sitting on life-changing stock gains. Heavy equity-based offers made in late 2023 have ballooned as these stocks have soared. Some Nvidia mid-level engineers, for instance, have seen total compensation swell from roughly $360,000 to $670,000."

"This is the new cost of leaving. Imagine getting 10,000 restricted stock units at $100 a share, which would be worth $1 million over four years. That's the typical vesting period for equity awards like this. At a normal company, the stock might go up a bit, or it might fall. So your year 3 and 4 vests would probably be worth about $500,000 in total, or maybe $750,000 if you're lucky and the stock goes up a bit."

Engineers at AMD, Broadcom, and Nvidia now hold rapidly appreciating equity that creates powerful incentives to remain at their firms. Late-2023 equity-based offers have ballooned as chipmaker stocks soared, lifting total compensation for some mid-level Nvidia engineers from roughly $360,000 to $670,000. A typical award of 10,000 restricted stock units granted at $100 per share would vest over four years and be worth $1 million at grant price. If the stock triples, the same award could reach $3 million, making departure after two years equivalent to forfeiting about $1.5 million. The effect functions as "silicon handcuffs," increasing the cost of leaving.

Read at Business Insider