Since the beginning of 2024, Nvidia's stock price has increased by 151%, and in the past five years, its stock price has soared by 3500%. Its market value has reached $3.3 trillion, surpassing Apple and Microsoft, becoming the largest listed company in human history.
The sharp rise in company stocks has made many Nvidia employees extremely wealthy. Most employees who joined the company five years ago or earlier have now become millionaires. However, this success also brings an unexpected negative effect: the relationships between employees have become increasingly tense. Some employees feel that some senior employees have started to "lie flat" and have not fulfilled their job responsibilities.
Old employees start to lie flat, new employees are dissatisfied
According to Levels.fyi, a US technology company's compensation and benefits data collection website, Nvidia's product managers (IC3 level) have an average annual basic salary of $260000 and can also receive $104000 in equity rewards.
NVIDIA Product Manager Compensation for All Levels (Updated: July 2, 2024) Levels. fyi
From the perspective of a lower level IC2 product manager, if they were hired 5 years ago, their first year equity reward market value would have exceeded $1.5 million.
Some netizens have stated that they have a friend who joined NVIDIA 6 years ago, and now, like most engineers, this friend has easily become a millionaire.
Nvidia is undoubtedly the biggest winner in today's wave of generative AI. Although it may seem like a good thing to make employees wealthy due to the success of the company, the downside also comes - having huge wealth makes some employees feel complacent. These veteran employees who have worked at Nvidia for many years may see their stock options and RSUs (Restricted Stock Units) appreciate significantly, which could make them less hardworking after becoming millionaires.
According to foreign media reports, many senior Nvidia executives and middle managers are now in a "semi retired" state, which has angered other Nvidia employees, some new employees feel extremely unfair, and internal employee relations have become tense.
However, a NVIDIA engineer stated that although the salaries of NVIDIA employees may seem substantial at first glance, they may not necessarily translate into long-term wealth. Although it appears that all NVIDIA employees are benefiting from the company's success, the reality is different.
The engineer said, "Even the most outstanding employees can receive up to 50% of their basic salary in equivalent stocks each year."
He also mentioned that for many employees, they did not receive the dividends of Nvidia's rapid development because most people do not hold stocks for the long term, but rather sell them in advance to pay for daily expenses.
The experience of NVIDIA employees is not unique in the technology industry. As Andrej Karpathy, former director of artificial intelligence at Tesla, put it, "Most people don't hold stocks, and the US government takes half." This sentiment reflects the broader challenges faced by employees at companies such as Nvidia and Tesla. Although the potential to become a millionaire is real, many employees ultimately sell stocks in advance to meet their immediate financial needs and repay debts.
The market competition is fierce, and Huang Renxun "shouts" old employees
According to foreign media reports, during an internal meeting of Nvidia aimed at all employees. Huang Renxun specifically selected a question from the pre submitted list of employee questions on how to handle those who appear to be in a "semi retired" state and answered it.
Huang Renxun stated that all employees should be the "CEO" of their own era. Huang Renxun emphasized the importance of personal responsibility and professional ethics, making it clear that the drive for innovation and excellence must remain strong.
Secondly, he admitted that some employees had worked at Nvidia for a long time and jokingly named some of them. He added that these are judgment adjustments that adults need to make, and each person can decide how much effort they are willing to put in, but they should do it responsibly.
The reason why he is so eager to rectify corporate culture is because he sees the increasingly competitive market environment in the AI chip market.
According to the 10-K document released by Nvidia in February this year, a customer of Nvidia accounts for 13% of its computing and networking department revenue, while indirect customers (including the aforementioned customers) who purchase Nvidia products through integrators and distributors account for 19% of the company's revenue.
Although Nvidia has not explicitly disclosed who its largest customers are, according to foreign media reports and speculations, Amazon, Microsoft, Meta, and Alphabet, the four major technology companies, may be Nvidia's largest customers, accounting for approximately 40% of its revenue. And all these companies have the ability to completely independently develop AI chips someday in the future.
That is to say, Nvidia's existing customers may one day become its biggest competitor.
A few days ago, Huang Renxun also discussed at NVIDIA's 2024 shareholder meeting how NVIDIA can maintain its competitive advantage. Huang Renxun said, "NVIDIA is committed to providing customers with excellent performance to ensure they have the lowest total cost of ownership."
This means that Nvidia chips may not necessarily be the cheapest on the market, but when potential customers consider performance, the cost of running chips, and their broader impact, Nvidia chips can generally present the "lowest total cost".
Huang Renxun: I don't like layoffs, I would rather "torture" them
Nvidia has never had large-scale layoffs in its history, even during turbulent periods such as the 2020 pandemic and the 2022 cryptocurrency crash, Huang Renxun has repeatedly assured employees that there will be no layoffs. The last official layoff of the company can be traced back to the 2008 financial crisis, during which senior management took the initiative to reduce salaries and minimize the impact on ordinary employees. But in 2022, these executives received additional stock rewards from Nvidia to compensate for the losses caused by the decrease in salaries.
Another unique feature is that, unlike its competitors, Nvidia rarely includes employees in performance improvement plans. If someone performs poorly, Nvidia will try to find a new team for them instead of directly including them in the coaching plan or firing them. Although this culture cultivates employee loyalty, objectively it may also breed laziness and speculative behavior. Therefore, some internal employees have pointed out that being fired is more difficult than being hired at Nvidia.
Huang Renxun once said that he does not like layoffs. Instead of firing employees, he would rather "torture" them to make them stronger. He believes that every employee will improve, and when they become enlightened, their great moment will come.
When mentioning NVIDIA's core corporate philosophy, Huang Renxun particularly emphasized the importance of "love" and "care". He believes that although these emotions cannot be quantified, they have a profound impact on both customers and employees. "I often use the word 'love', and 'care' is also something I often mention, because in many cases, they can most accurately express emotions that cannot be described with other words."
Blind
Most NVIDIA employees hold a very satisfied attitude towards the company's boss, Huang Renxun. In August 2023, during the anonymous community Blind in the US technology company workplace, NVIDIA's Huang Renxun received 96% of the vote for the "Most Recognized CEO by All US Employees", making him the only CEO with over 90% support.
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