Meta changes exec bonuses after backlash

Last week, I reported on the uproar inside Meta over executives receiving individual bonus percentages that greatly exceeded the company average. Today, CEO Mark Zuckerberg announced internally that the individual performance percentage for execs is going away. I have more on that decision, as well as how the company is thinking about working with Microsoft and OpenAI to create an AI coding companion for employees. Also, some takeaways from this week’s slew of tech company earnings. And why Bluesky is having a moment.

Before I proceed, I wanted to flag my interview with Lightspark CEO David Marcus that aired on the Decoder podcast earlier this week. There are plenty of reasons to be bearish about crypto right now, but I wanted to hear the optimistic side of the.. coin from Marcus, and why he is betting on Bitcoin specifically. I hope you’ll give our conversation a listen.

During an internal Q&A on Tuesday, Meta CTO Andrew Bosworth was asked why he and other top execs received individual performance bonus ratings that were well above the companywide rating applied to everyone.

As one of Meta’s most tenured leaders who has known Zuckerberg since Harvard days, Bosworth tends to avoid sanitized corporate speak, for better and for worse. His answer to the question on Tuesday was no exception.

“I am not responsible for my performance rating,” he said during the Q&A, according to audio of his remarks I obtained. “Like all of you, I go through PSC [Performance Summary Cycle]. I write a self review. Peers give feedback. And my manager, Mark Zuckerberg, looks at that and decides how to assess me… And every time I get the assessment it’s a complete surprise. I have no idea what I’m going to get. It could be bad, it could be good. I really am not that sure. He’s not someone who gives a lot of feedback over the course of the year. So, my point only being, when I saw my own performance review I was pleasantly surprised.”

He went on to chastise the “brigading” of the salute emoji and phrases like “executive performance = company performance” in the internal comments for Zuckerberg’s Q&A from the week prior, though he said he agreed with the critique itself: “I think company performance is executive performance. I think they should get rid of the individual multiplier for me and people like me, and I have said so.”

Referencing Zuckerberg’s earlier comments about taking responsibility for the layoffs, Bosworth said, “that he told us to hire in many cases over our objections, and so we did. And then he told us that we hired too much and we had to make changes to our teams, sometimes over objections, and we did. And so I think he is rightly trying to take responsibility.”

“Insofar that what people really want is blood, they’re not going to get it,” he continued. “Mark is saying, as he did in November and as he is now, ‘This was me. This is my responsibility.’ And people are like, ‘Well, great, Mark. You can’t take accountability because you make $1 a year in salary. You already have all this stock.’ Yep, that’s fair. There is going to be no blood. And it’s very unsatisfying. My only counterpoint to that is that if there was blood it would still be unsatisfying. It wouldn’t make you feel one bit better or different than you feel now.”

Indeed, no blood was offered during Zuckerberg’s Q&A with employees earlier today. But a change was announced. While he had defended the higher bonus percentage for execs the week before, Zuckerberg said today that his c-suite will no longer get individual bonus percentages. Instead, they’ll only be subject to the bonus percentage that reflects the company’s overall performance for the year, per a transcript of his comments shared with me.

“The bottom line here is that I basically agree with the point in this question that exec performance for the very top folks is basically the same as the company performance,” he said. “The longer answer is that I’ve always viewed my own performance as being the same as the company’s performance. And the reality is that a lot of our results are tied to decisions that I make.”

During Bosworth’s Q&A earlier this week with Meta employees, he was also asked about whether there were any plans to introduce something similar to GitHub’s AI Copilot for assisting engineers with coding. He revealed that discussions are underway with Microsoft and OpenAI about licensing a bespoke AI tool that has access to Meta’s internal code.

“The cost is crazy,” he said. “They want to charge like seven cents a query or something, which is pretty high. The reason they need to do that is because [of] the context window we need for them to be able to have [an] understanding of our code base without ever having our code base integrated into a model, which would be bad.”

“That’s the only place in the company we’re really considering working with Microsoft and OpenAI, just because there’s a natural business integration there,” he explained. “Otherwise, we’re working on a companion that is more about all of our code and our internal documentation, built on our own infrastructure. We are moving very fast. I think we’ll have something to play with internally, I’m hoping in mid-June, maybe late June.”

His comments give an interesting window into how a company as large as Meta is thinking about adopting generative AI tools for employees, and how expensive this technology is to operate on sequestered data. Relatedly, OpenAI announced this week that it’s working on a ChatGPT Business subscription “for professionals who need more control over their data as well as enterprises seeking to manage their end users.”

Google’s search business has “resilience,” but for how long? I would have loved for an analyst on the earnings call this week to ask Sundar Pichai about how his negotiations are going with Apple to keep the default search position in Safari next year…

The future of Microsoft’s business is increasingly software, not hardware. Devices revenue is down but software and services is up. And over 10,000 companies have already signed up for its Copilot for Business program.

What’s actually behind Amazon’s AWS slowdown? The stock dove on the earnings call commentary about weaker than expected cloud growth this quarter. I wonder how much of AWS’s slowing growth is self-inflicted, though. For example, I’ve already reported on how hard it has been for startups to get AWS lit up for their AI features.

Meta is taking a big swing on generative AI this year. From Zuckerberg’s earnings comments I broke out on The Verge: “We’re exploring chat experiences in WhatsApp and Messenger, visual creation tools for posts in Facebook and Instagram and ads, and over time video and multi-modal experiences as well.”

Like exclusive album drops, the era of splashy podcast deals is over. Here’s Spotify CEO Daniel Ek in response to an analyst question: “You’re right in calling out the overpaying and over-investing, and I can start off by saying that we’re not going to do that.”

Snap doesn’t have the “luxury of walking and chewing gum.” Today the company reported another bad quarter, sending the stock nosediving. The aforementioned line from analyst Rich Greenfield on the earnings call pretty sums up where things are with Snap and its investors. They want more focus on the core business versus AR and AI, though Evan Spiegel seems convinced that the strategy will still pay off eventually.

The new “metaverse:” The word “AI” was said more than 200 times across Q1 earnings calls for Meta, Google, and Microsoft this week, according to Bloomberg.

As I noted on Twitter yesterday, Bluesky seems to be hitting an inflection point with the tech and media early adopter crowd. (I’m @alexheath.bsky.social there.)

I’ve written about Bluesky plenty here already, including when I asked Jack Dorsey about it in the very first edition of this newsletter, and it was only a matter of time before the buzz spread. I mean, AOC and Dril just joined. “Bluesky” was also a trending topic today on Twitter in the US, which I’m sure will lead to Elon Musk blocking all mentions of it in due time. The team behind Bluesky said that today is the biggest single-day jump in new users ever.

It’s way too early to tell what platform can potentially siphon away Twitter’s disgruntled power users for good, though I think Bluesky has a good shot. It would certainly be the most poetic outcome, given that the project was incubated and funded by Dorsey before Musk took over.

That said, there’s always the chance that Mastodon’s similar approach to decentralization has already hit enough critical mass to win, or that whatever the “Instagram for your thoughts” app Meta is developing will steal the attention. Regardless of what happens next, I think it’s worth securing your Bluesky handle if you haven’t already. And if you’re curious for more of the project’s backstory, I highly recommend this profile of CEO Jay Graber by Michael del Castillo in Forbes.

Elon Musk meeting with the president of South Korea in Washington DC.

Jeff Bezos with Lauren Sanchez showing up at Bad Bunny’s set for the second weekend of Coachella. (Sorry, Jeff, but that shirt is not working.)

David Sacks speaking at Miami Tech Week for a talk titled “Tech is Under Siege.” (Is it really, though?)

Sam Altman being interviewed by Steve Huffman during a recent Reddit all hands.

It was another brutal week for layoffs across tech and media. Here are three company memos announcing cuts this week that I found worth highlighting:

In last week’s edition, I mistakenly said that Meta had laid off the majority of its team dedicated to combatting misinformation across Facebook and Instagram. In actuality, the majority of the engineers in the misinformation group were laid off. I regret not being more specific originally and wanted to note it here for those of you who haven’t seen my update on The Verge’s website.

That’s it for this week. I’ll be back next Thursday. In the meantime, if you have any feedback on this edition or strong feelings about how much money your boss makes, let me know.