The stock surge Nvidia is enjoying, largely because of its dominance in AI, has created quite a few new millionaires among the company’s employees. Unfortunately, many of them cannot yet enjoy their newfound wealth and still work long days and in stressful conditions, according to a recent Bloomberg report.
Nvidia’s stock price has risen more than 3,775 percent since 2019, meaning employees who receive stock grants as compensation have quickly become millionaires. You'd be mistaken if you thought they’d be living lavish lifestyles and retiring early. While these employees can purchase expensive sports and luxury cars and even have them custom-painted in the iconic Nvidia colors, those fancy cars spend more time in Nvidia’s parking lot than anywhere else.
Current and former employees say the work conditions at Nvidia include highly stressful days that don’t end until one or two in the morning, seven days a week. According to the ten people who spoke to Bloomberg anonymously, those working on engineering teams often work even longer days. Nvidia CEO Jensen Huang is known for fostering a culture of overworking, saying that he prefers to “torture (employees) into greatness” rather than fire them.
This might work in Nvidia’s favor for retaining employees because of how the stock packages are doled out: they don’t become vested until four years after they’re granted. If a stock package isn’t vested, the employee cannot sell it. Around the time the employee can sell one lot of shares, there’s already another for the worker to wait on.
Few companies in the tech industry share this same culture. In fact, there has been a cliche for years of a “rest and vest” culture. In this situation, employees sit around and play video games while they wait for their stock packages to vest. Not so Nvidia, though, where such an employee would face shame and ridicule from colleagues and managers alike.
In this way, a compensation tactic that used to be looked on as a golden parachute could now become a set of golden handcuffs instead. The new multimillionaires are buying their fancy cars and multimillion-dollar homes, but many of them could wait several more years before they can enjoy them.
How many of Nvidia’s employees are holding out for additional treasure troves of stock to become vested? According to Bloomberg, in 2023, 5.3 percent of the company’s employees left Nvidia. However, once Nvidia achieved its $1 trillion market capitalization, that attrition rate dropped by almost half to just 2.7 percent. To put this into perspective, the average turnover rate for the semiconductor industry is 17.7 percent.
Despite the vast differences between the workplace culture at Nvidia compared to other semiconductor and Big Tech companies, most employees seem to approve of Huang's expectations and leadership style. His approval rating on Glassdoor has only dropped by a percentage point, to 97 percent, since last year.
