Dive Brief:
- Social media platform Twitter has lost 27% of its stock value over the past two weeks as a result of potential buyers backing out, CNBC reports, which is hurting the employees who rely on its stock options as a form of compensation.
- According to CNBC, stock-based compensation totaled over $680 million in 2015, or 18% of company revenue. CNBC says that amount tops any other U.S. technology company values over $1 billion.
- Just over a half of employees have a favorable business outlook, per the report. Though such methods of compensation are popular among tech companies, Twitter's inability to monetize users has affected the company's status on a large scale.
Dive Insight:
Companies like Chobani have made headlines for offering employees a stake in company success with stock options, seen by many observers as generous ways for company leaders to give back to workers. Given the current climate of high executive pay, some observers have taken aim at executive stock options as a way to lower the pay gap between different levels of an organization.
Twitter's story, however, is one that calls for caution. Much of the problem stems from the fact that the platform has not experienced much growth even ten years after its launch. Companies like Twitter may argue, however, that its own stock option situation does not actually reflect business health. HR leaders should simply evaluate their own organization's financial health on a case-by-case basis before committing to the stock option strategy.
