Nvidia has experienced an extraordinary corporate ascent, establishing itself as one of the few tech companies with a market capitalization exceeding $3 trillion. Since 2019, Nvidia’s shares have surged by 3,776%.
This remarkable increase in share value has resulted in a unique situation where many senior employees have become millionaires. However, a Bloomberg article reveals that life at Nvidia isn’t all glamour and success. The intense pressure of leading the AI chip industry has created significant stress for employees, hindering their ability to fully enjoy their newfound wealth.
Millionaire employees. The existence of millionaire employees at Nvidia is uncommon in the corporate world, although not completely unique. A June survey of more than 3,000 of the company’s 30,000 employees on Blind found that 76% of them were millionaires, with one in three having a net worth exceeding $20 million.
The primary source of this considerable wealth is the Employee Stock Purchase Plan (ESPP), which Nvidia has been offering for the past 18 years. This plan allows employees to allocate between 10% and 15% of their annual salary to purchase company stock. Employees who have been part of the plan for an extended period have amassed enough shares to afford luxury lifestyles, such as commuting to work in a Lamborghini instead of by bus.
The dark side of success: a “pressure cooker” at work. According to statements to Bloomberg from current Nvidia employees and former employees, the work culture at the company can be extremely demanding even for those with millions in their portfolios.
A few months ago, Nvidia’s CEO claimed at a Stripe conference that he’d rather “torture [employees] into greatness” than fire them, as most of the industry was doing. Ten Nvidia employees told Bloomberg that they were expected to work seven days a week, with days ending at 1 a.m. or 2 a.m., and have up to seven meetings a day.
Much to gain. Despite this demanding work environment, Nvidia’s employee turnover data has fallen as its stock price has risen.
Nvidia’s 2023 Corporate Responsibility Report shows that its employee turnover rate for 2023 was 5.3%. However, the 2024 Sustainability Report indicates that, following the company’s record capitalization, its turnover rate fell to 2.7%, well below the industry average of 17.7%. Part of the success in staff retention is attributed to the stock packages that vest every four years, incentivizing employees to stay with the company.
Nvidia’s “golden handcuffs.” Nvidia employees often hold back from resigning due to their financial ties to the company, a phenomenon commonly referred to as “golden handcuffs.” Many employees are in this situation due to the value of their stock and the potential for growth in their investment portfolios.
According to Bloomberg data, Colette Kress, Nvidia’s CFO for the past 11 years, holds a stock package worth about $758.7 million. In contrast, Intel CFO Dave Zinsner receives a larger annual salary bonus but holds a stock package valued at “just” $3.13 million. AMD CFO Jean Hu has a stock package valued at $6.43 million, and shares a similar management background with Kress, possibly due to the connection between the CEOs of AMD and Nvidia.
Under these circumstances, who among these CFOs would lose less by leaving their company?
Jensen Huang has made them CEOs. Jensen Huang’s leadership style is unique in that it emphasizes closeness to his employees and a culture of hard work. Some new employees have complained that their more senior, wealthier colleagues have a more relaxed approach.
However, in an internal meeting reported by Business Insider, Huang stated that working at Nvidia is like a “voluntary sport,” so each employee must act as the “CEO” of their own time. According to him, these are decisions that should be made by adults. Huang also emphasized that every individual should be accountable for their role and work as hard as they personally deem necessary.
Image | Maurizio Pesce (via Flickr)
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