The Wall Street Journal recently (Feb 28) reported that large technology companies such as Alphabet, Amazon and Meta are making a significant change in their compensation package for engineers and programmers. "After years of enticing employees with large stock awards and surging share prices, some technology companies are deploying a time-tested tool: cash." In addition to increasing the size of merit raise pools, caps on bonuses and salaries are being raised or eliminated. This is a big switch because historically these engineers have received stock awards equivalent to 30-100% of salary. Often these stock awards cannot be cashed out until the employee has been with the firm for there to five additional years, Now stock grants and options are being de-emphasized for engineers and programmers (but C-suite executives are still receiving high-powered incentives).

Based on what you have learned in this course, explain (1) why these large tech firms might have decided to rely more on cash and less on stock for paying their engineers and programmers and (2) why they are doing this in today's environment.

    

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1 Large technology companies are aware that their programmers and engineers have made considerable investments in offering more varied well being and ... View the full answer