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Wealthy Nvidia employees are taking it easy in ‘semi-retirement mode' — even middle managers make $1 million a year or more
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Well, that's as good as any reason for the huge stock sell-offs when Nvidia was topping out a few weeks back.
Some of them likely had it when it was hovering in the low $ 30s, hell some when it was still in the teens.
If I was making some $120K a year and saw a chance to pump my bank account into the millions overnight I'd certainly take it.
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Zarathustra[H]
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Hmm. Having senior employees barely working and raking in million + salaries at the same time as you are proclaiming that the cost realities of the market require that GPU's are no longer affordable like they used to be, seems amusing at best.
Sounds like Nvidia needs to shit can many of the "semi-retired" folks, better reward the folks that keep the lights on, and become more price competitive in the market.
Well, that last one is not going to happen until fab capacity opens up more. Too much demand from AI companies for that right now, but still.
They sound like the very definition of a company that has become fat, lazy and resting on their laurels. It's time for a hungry competitor to come in and really upset things. Which is difficult in a market with such a huge technological barrier to entry. You have to be REALLY good to in one launch come in and offset 2+ decades of iterative design improvement.
Sounds like Nvidia needs to shit can many of the "semi-retired" folks, better reward the folks that keep the lights on, and become more price competitive in the market.
Well, that last one is not going to happen until fab capacity opens up more. Too much demand from AI companies for that right now, but still.
They sound like the very definition of a company that has become fat, lazy and resting on their laurels. It's time for a hungry competitor to come in and really upset things. Which is difficult in a market with such a huge technological barrier to entry. You have to be REALLY good to in one launch come in and offset 2+ decades of iterative design improvement.
UnknownSouljer
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I don't think the issue is that certain people above the 'regular employees' are making more money. It's more the issue that they're making insane money for lazily doing nothing.
tigger1612
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As someone who goes to work everyday to provide for my family I see nothing wrong here from their financial perspective. If there is an issue with their performance then that should come out every year at review time.
Exactly.
Same thing once happened at Microsoft. Early or long-time employees with big stock options. Other employees resented them. That was years ago.
Kind of goes with the territory with equity based compensation. When the stock goes crazy, so does compensation. Then comp has to stay crazy if you want to retain the people who have business knowledge.
Twisted Kidney
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Whatever strategy nVidia is using is working. If they decided to rock the boat because of tradition they'd be idiots.
techie81
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Work smarter, not harder.
I'm just guessing, but a lot the wealth is probably from stock options awarded years ago, so even if they dump them it won't reduce their wage liabilities by much.
It's one of those problems that comes with success: a reduced incentive to continue pushing. The good news is they probably will be just fine once they eliminate the people harming morale, middle managers don't really do much, anyway.
JayteeBates
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I would absolutely have done just that, cashed in options to then be siting on 7 or 8 figure bank account in cash. Pump that into something that gives dividends, never worry about work again.
It sounds like that, and yet every generation they push the technology forward at a pace that no one else seems to be able to match. This isn’t the same situation as Intel with their “14nm+++++” nonsense. Nvidia might have some employee bloat like every other major corporation, but which competitor is really challenging them right now? Not saying that will always be the case, but as far as I can tell, they currently have a massive lead and still manage to grow, or at least maintain, every product cycle.
jacuzz1
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I am so pissed that i sold me stock to early , so pissed.
I wonder how much how much of this is Millenials and GenZers (probably more of the latter at this point) think they should walk into Boomer/GenX pay at entry level. Nvidia didn't get to their financial position on the backs of Millenial/GenZ workforce. Boomers/GenX laid the foundation for their dominance and now are being rewarded for it.
This is why you don't let your employees buy group lotto tickets. lol
As long as the first time they see a major hurdle coming for the we are an AI company switch, they don't all go and sell a few million in stock and retire for real.
It's a problem all the tech companies that pay in stock have to deal with.... but for Nvidia it will be accelerated. Normally if you give an employee a few thousand in stock its not worth much more even years later. In this case paying someone 10 or 20k in stock 3 or 4 years ago would be equal to CEO pay 40 years ago. When you have so many employees going from decent but not life changing pay to having millions in stock within a year or two, it could be an actual major issue. Also have to wonder how much digital coin some of them have. haha
As long as the first time they see a major hurdle coming for the we are an AI company switch, they don't all go and sell a few million in stock and retire for real.
It's a problem all the tech companies that pay in stock have to deal with.... but for Nvidia it will be accelerated. Normally if you give an employee a few thousand in stock its not worth much more even years later. In this case paying someone 10 or 20k in stock 3 or 4 years ago would be equal to CEO pay 40 years ago. When you have so many employees going from decent but not life changing pay to having millions in stock within a year or two, it could be an actual major issue. Also have to wonder how much digital coin some of them have. haha
I mean, to some extent this is unavoidable. New employees didn't build Nvidia into the company it is today - that was done by the "old timers." I've seen this before in two other companies I worked at. Everyone acts like it's just the big wigs making bank - but the reality is that there are plenty of secretaries with tens of millions of dollars in stock options too. No they aren't Jeff Bezos rich, but they don't care. They are more than happy enough, and I was always glad to see the peons be part of the winnings for a change. They put in the time, they took the risk of working at a startup, and now they all reap the rewards.
And when you don't HAVE to work anymore, of course they are going to slack a bit. They'll eventually move on. I think this just is the way of things, and new people are jealous.
And when you don't HAVE to work anymore, of course they are going to slack a bit. They'll eventually move on. I think this just is the way of things, and new people are jealous.
I worked for a fortune 500 non tech company at one point. The founder had long since given way to more then a few CEOs. He used to come in a few days a weak anyway and work.... often just doing "grunt" stuff. Man had a small collection of shirts that looked like they were thrift store finds. The first time I met him when I was at the head office... he chatted me up for 15m (he was genuinely interested in some new territory) all I could think was, this guy has a mustard stain that looks 10 years old on his shirt. lol
There were stories of the early employees that all retired on their decent stock eggs. They also allowed the companies first Janitor to come by and work a few days a month... his accounts were measured in the 8 figures. Drove his Benz to the office to clean a few rooms when he felt like putting in a day.
Problem for Nvidia will be the speed at which so many of its mid level workers have found themselevs with millions in stock. The company I was at it was a 20-30 year process... sure the earliest employees got a very nice amount of stock when you count 20 years of splits. No one got 10% in stock that 2 years later ended up being worth 200x their annual salary.
Ya that's fair - both of my examples were over decades. You kind of can't complain about someone who has literally dedicated their entire career to a single company. Nvidia might have moved a bit faster - more of a hockey stick growth chart.I worked for a fortune 500 non tech company at one point. The founder had long since given way to more then a few CEOs. He used to come in a few days a weak anyway and work.... often just doing "grunt" stuff. Man had a small collection of shirts that looked like they were thrift store finds. The first time I met him when I was at the head office... he chatted me up for 15m (he was genuinely interested in some new territory) all I could think was, this guy has a mustard stain that looks 10 years old on his shirt. lol
There were stories of the early employees that all retired on their decent stock eggs. They also allowed the companies first Janitor to come by and work a few days a month... his accounts were measured in the 8 figures. Drove his Benz to the office to clean a few rooms when he felt like putting in a day.
Problem for Nvidia will be the speed at which so many of its mid level workers have found themselevs with millions in stock. The company I was at it was a 20-30 year process... sure the earliest employees got a very nice amount of stock when you count 20 years of splits. No one got 10% in stock that 2 years later ended up being worth 200x their annual salary.
Yes the founder... I could only focus on that mustard stain. The other thought in my head though is this guy probably doesn't even know how much money he has... I mean I know its measured in billions but he could loose a 100m or two and not notice. Yet here he is all excited about a new territory that might make the company a few million in a few years. Its funny the work really does drive at least some people. Some of these Nvidia middle management though, its like they have won a lottery. 100-150k a year nice wages... then all of a sudden 7 or 8 years of stock payments just turned into 50 years of pay. Tesla is another one that you have to wonder if the early retirement drain doesn't become a real issue.
Every older generation complains about the younger generation. The Boomers/Gen X had the Silent Generation defeat a coalition of two of the strongest militaries on Earth at a very high cost which laid the foundation for a big economic boom in the United States (and the West by extension) that the Boomers took absolute advantage of. Most Millennials graduated into the Great Financial Crisis by comparison. Yes, a lot of younger workers think they deserve more than they're worth. Guess what? So do a lot of older workers. The market will sort it out.
I worked for a fortune 500 non tech company at one point. The founder had long since given way to more then a few CEOs. He used to come in a few days a weak anyway and work.... often just doing "grunt" stuff. Man had a small collection of shirts that looked like they were thrift store finds. The first time I met him when I was at the head office... he chatted me up for 15m (he was genuinely interested in some new territory) all I could think was, this guy has a mustard stain that looks 10 years old on his shirt. lol
There were stories of the early employees that all retired on their decent stock eggs. They also allowed the companies first Janitor to come by and work a few days a month... his accounts were measured in the 8 figures. Drove his Benz to the office to clean a few rooms when he felt like putting in a day.
Problem for Nvidia will be the speed at which so many of its mid level workers have found themselevs with millions in stock. The company I was at it was a 20-30 year process... sure the earliest employees got a very nice amount of stock when you count 20 years of splits. No one got 10% in stock that 2 years later ended up being worth 200x their annual salary.
Reminds me of this dude. Guy who painted the Facebook office was paid in stock. Guess who doesn't have to paint offices anymore?
https://www.businessinsider.com/gra...aded artist David,Facebook was just a startup.
2015 article, so no idea what he's worth now, but I love this story.
Apparently, a small city became one of a ridiculous amount of millionaire because of Dell, obviously Microsoft early employee, I can imagine it is quite common in that space, some Tesla factory floor employee became millionaires.
We can imagine there something a bit healthy in this, winners becoming compleasant, startup being hungry, help the circle go around, like nature.
We can imagine there something a bit healthy in this, winners becoming compleasant, startup being hungry, help the circle go around, like nature.
Reminds me of that Janitor I mentioned. I mean they always paid him... but when the company went public the founder made sure he rewarded a handful of people that were there with him when he legit had issues making paydays on time. I heard stories about how he would have the heat in the building barely on in the winter for the first handful of years. He rewarded the people that stuck those years out. The painter story is a good one, hey asking someone to eat at the time the cost of all the materials for a big paint job like that is no small ask.
StoleMyOwnCar
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I agree, though I'm not sure about the "market will sort it out" part. I think there's plenty of room in capitalism for it to not be sorted out, once any entity gets to a certain mass, and/or has the connections. Can anyone actually give Nvidia a run for their money at this point? Unlike many overpaid and utterly useless CEOs, their CEO appears to still be trying and actually has the talent level to back it up. And enough competent employees left, even with the overpaid garbage. The young blood in the company is usually what drives changes and advancement though, so we'll see if this sort of company culture hurts them in the long run. But at their current mass? Unlikely...
An aside, I will say that I feel terrible for the generations that had nothing to do but essentially fight for their lives in these costly world wars. Unlike everyone that came later, they probably didn't even get much for it. It was essentially an existential crisis. But this whole "younger generation is the problem" nonsense has always needed to go. They grew up with your parenting and guidance, in the world that you helped create. Or what, did the Silent Generation fight so that their children could also grow up fighting? Would that make it fair? The world advances, lives hopefully get easier. Things change. The type of pressures change, too. Fewer people are getting shot left and right, but no one should have had to, to begin with. I think the biggest crisis of the current generation will be AI. No, not from a "they're going to destroy us all" but, I guess indirectly that's true when it gets advanced enough to start taking jobs and replacing people in decision-making and content generation positions. The writers' guild already had to fight. Other industries will be getting hit, and who knows how all of it will pan out. People are too optimistically cynical about how all of this will play out. It almost feels like the entire planet is in denial, sometimes. The AI boom mostly also serves the wealthy, not the poor. It's further centralization of power while eliminating possibility of naysayers.
Well, people are just animals that respond to stimuli and attempt to make the best decisions to preserve themselves and the things they care about (interests included, and sometimes the interest takes precedence over self preservation). This is the only constant to humanity.
Good post. A few thoughts:
1) Nothing is ever assured in tech or corporate America. Apple was left for dead. Microsoft completely missed the smartphone revolution until it was too late, and they looked like they were falling behind only to have Nadella come in and make the company great again. General Electric was dominant in multiple industries at one point, but look at them now. Intel had untouchable dominance in CPUs, but whoops, here comes Athlon, then Ryzen, and now RISC is taking off, and where is Intel? In Nvidia's case, I think Jensen Huang is one of the best CEOs of this generation. Maybe in history. Dude's the real deal. What's his succession plan? Not sure. Even if he does stay in the company for decades to come though, how much do Microsoft, Google, Apple, Meta, etc, all want to be reliant on one supplier? They all have deep pockets, maybe they want to get in on the game. Apple is already making some killer chips with the M-Series. Maybe they hire some talent and start getting into Nvidia's kitchen, a company which they hate. Or they don't. Hard to say, but nothing is assured.
2) AI's threat to jobs is overstated in my opinion. Why? Because every technological revolution is always going to "take everyone's job away". The fallacy in that thinking is that it assumes there is a fixed supply of jobs in the market, and it ignores all of the jobs that AI will create. My prediction is AI will supercharge productivity in the same way the tractor did.
3) Everything benefits the wealthy. That's how it will always be.
StoleMyOwnCar
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It's not the first time I've seen this argument. My problem with it is that I think it's apples to oranges.
The whole benefit/advantage/inherent characteristic of humans is the ability to do flexible, (comparatively) intelligent, and sophisticated decision making. Sure, we have thumbs, can use tools, and can perform biomechanical labor, but at the end of the day the thing that sets us apart from other animals is basically our brains (and/or social structures, and the ability to create sophisticated ones). Most tools aim to replace humans, but purely in a sense that didn't involve our inherent advantage and characteristics. They're mostly aids to us. That's why it creates new jobs in other (usually higher order) places. Current AI is mostly like this (except in the creative space, where it's already encroaching onto toes, even with its messy implementations). Future AI may not be like that. AI was built from the ground up to be able to undertake at least a subset of the thinking that people would be normally advantageous at. We're a very long ways away from overly sophisticated, general AI.
But, the more advanced current machine learning keeps getting, the larger the set of normally human oversight tasks that it'll be able to accomplish will grow. People can already plug huge portions of code into these LLMs and have it translate it to another language. Or ask it a question and get out a code segment. How long until you have a model that takes huge code segments and categorizes which part goes where, so you can ask a complex query and receive an entire codebase? And then how long until the person asking for that codebase can be replaced because another algorithm determines what needs to be implemented? Absolutely no company would say no to workers that they basically only had to pay electricity for. Sure, humans might be necessary, but the amount that are necessary is going to keep decreasing and decreasing, and getting more and more high level/skilled. Some third world countries have sweatcamps where people earn pennies to digitally tag images so image AI will have an easier time later, though. So I guess there's that... until they get replaced with an AI that does it. They already have AI that can tag images, yes.
Well anyway that's my crackpot doomsday scenario for the proletariat of the next decade, thanks for reading lol.
The problem is that I think companies are getting better and better at attempting to secure this. Kind of like upper management always cover their asses above caring about the company's bottom line. So... we'll see. I can only hope you're right, but I'm a bit skeptical about our capitalism actually working properly as we keep going forward as we are. And Nvidia is in a great spot to secure its legacy. I think the only thing that could stop them is basically government intervention.
Darunion
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But the other side of the argument is the new jobs it potentially creates. If we are gonna play far reaching scenarios, that means I could afford an AI model that specializes in coding and graphics and then start my own game company which might have been out of my reach previously. Instead of indie games looking like indie looking like indie games, maybe 3 guys an a couple AI systems can make a star citizen and actually release it? Maybe i have really awesome ideas for fun games that I just don't have the means to produce my vision either due to funding or time or insert any other reason. And something like this could enable that vision to be a reality for me.
Just arguing as devils advocate, but not all roads lead to fail. So many thinking reducing machines (calculator, computer, word processors etc) have not destroyed us yet, completely.
That one is hard to predict, at a certain point an AI-robots able to do most jobs could be different than other technological revolution. Really depends on many factor including how good it really gets, robots could do everything and everyone calling their hobby jobs and still get money for it, like a podcaster.
I think you're making the same mistake a lot of people make. As I said, the problem here is people aren't envisioning what jobs will be created with the new tech. Jobs you've never heard of. AI will supercharge productivity, but people will find something else to do. No different than the Luddites, who were certain everyone's jobs were going to be gone and people would have no jobs ever again because the sewing machine was on it's way in. The same discussion was had when tractors showed up. All those agricultural workers are gone. The economy used to be mostly agrarian. Now it's like 3% agrarian and we've never produced so much food, and unemployment is at record lows. The lesson is to be optimistic and embrace advancement. The world is generally better tomorrow than it is today.
There are a lot of things that can go wrong for Nvidia. Some is within their control, some is not, none of it may come to pass, or all of it will. Time will tell.
In any case, I remain invested in the company. I think they'll dominate in the foreseeable future, and the market is big enough that I'd expect AMD gets a decent chunk of business as well, if for no other reason than companies seldom want to be beholden to a single solutions provider and they're the next best alternative.
Indeed, so the economy evolves as it always does.
I work in corporate sales for an automation company. I can tell you right now if you're a welder, electrician, general labourer, I can get you like 6 jobs tomorrow. All of my customers are hiring human worker right now, even the heavily automated ones, and they can't find enough employees (especially because you can work in a factory from home, but that's another discussion). Granted, a robot might be able to eventually replace all of these people, but they can't as of right now, and when they can I'm sure those people will find something else to do, as has always happened throughout history.
Yes in our lifetime something like plumber should be extremely safe, old house, sometime different, custom, but like you say Robot does not have much limit in that regard.
Nurse for human contact (helped with robots that do all the non talking too, touching work) could be also a type that survive robot being able to do it, but unlike precedent revolution, displacing human to do something else robot can't could be less true, as it could be possible for a future robot to be able to do everything and more.
And, while true for the always happened, it was also quite violent social change during the transition phase.
Zarathustra[H]
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It's what the economists like to call "transitory effects".
We go from one acceptable state to another acceptable state, and what happens in between? Don't worry, those are just "transitory effects". Except lots of those people have their lives ruined from those "transitory effects", and it takes people to fight for change to get to that new acceptable state. They tend to conveniently forget that part.
As much as I hate to admit it, AI may be the future, but how much is it OK to ruin peoples lives to arrive at that future? Even if it is only "transitory"?
This is an artifact of how compensation works for large tech here in the Bay Area.
Let’s say hypothetically you join and the starting package includes restricted stock in the $300k range that vests over say 4 years. If the vesting schedule were say twice a year, then you’d get $300k/8 = $32.5k every six months. Nothing to sneeze at but that’s peanuts in this area. In your second year and third and fourth, you’re working hard, doing well, and maybe get another $200k each year on the same 4 year vesting period, which is 200/8 = $25k every six months. By year 4, you’d be getting 32+20+20+20 every six months - at that point your stock roughly matches your base salary.
Now consider what happens as the share price rises. The unvested portion of that initial $300k grant appreciates. 3x increase? That 32k semi-annually is now $96k.
It becomes rather understandable that senior engineers to middle level engineering management can find themselves at or approaching $1M a year.
Of course, the gravy train eventually peters off if the stock levels off—eventually those old grants (worth far more than at the time they were granted) rotate off and are replaced by new ones pegged to the new share price.
But, it does give rise to some awkward situations, including people like pulling in income to a degree that motivations can abate, and of course there’s the withdrawal symptoms as old grants expire and net income starts to come back home to earth. Lately I’ve been dealing with a young employee, very bright but definitely benefitted off share price increases, and just assumed each yaar’s income will be higher than the last. Base salary, sure. Stock vesting? Not always.
Let’s say hypothetically you join and the starting package includes restricted stock in the $300k range that vests over say 4 years. If the vesting schedule were say twice a year, then you’d get $300k/8 = $32.5k every six months. Nothing to sneeze at but that’s peanuts in this area. In your second year and third and fourth, you’re working hard, doing well, and maybe get another $200k each year on the same 4 year vesting period, which is 200/8 = $25k every six months. By year 4, you’d be getting 32+20+20+20 every six months - at that point your stock roughly matches your base salary.
Now consider what happens as the share price rises. The unvested portion of that initial $300k grant appreciates. 3x increase? That 32k semi-annually is now $96k.
It becomes rather understandable that senior engineers to middle level engineering management can find themselves at or approaching $1M a year.
Of course, the gravy train eventually peters off if the stock levels off—eventually those old grants (worth far more than at the time they were granted) rotate off and are replaced by new ones pegged to the new share price.
But, it does give rise to some awkward situations, including people like pulling in income to a degree that motivations can abate, and of course there’s the withdrawal symptoms as old grants expire and net income starts to come back home to earth. Lately I’ve been dealing with a young employee, very bright but definitely benefitted off share price increases, and just assumed each yaar’s income will be higher than the last. Base salary, sure. Stock vesting? Not always.
This is very true and somehow people forget history. We thought everyone was going to lose their jobs when robotics went big in factories...guess what? Someone has to maintain, monitor, troubleshoot and program them.
The job market will do what it always has done. Change and adapt. Not many people out there know how to use a manual loom anymore....
Darunion
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Right? we don't even talk about how telephone switch board operators were all replaced by devices. We could go on for hours of all the 'what were manual human jobs' over time that now when we think about it we feel its silly that people ever had to do such things.