OpenAI pays record‑high packages to retain top AI talent
What's the story
OpenAI has set a new record in the tech industry by offering its employees an average stock-based compensation of $1.5 million each in 2025. The company's workforce is around 4,000 people. This figure is more than seven times what Google paid its employees in stock options back in 2003, before going public with an IPO in 2004.
Comparison
OpenAI's compensation packages dwarf those of other tech giants
The $1.5 million stock-based compensation per employee at OpenAI is a whopping 34 times higher than the average employee compensation at 18 other major tech companies in the year before their IPOs, a Wall Street Journal analysis showed. The figures were adjusted for inflation to reflect 2025 dollars and covered major tech IPOs over the last 25 years.
Talent retention
OpenAI's strategy to retain top talent amid AI race
In a bid to stay ahead in the AI race, OpenAI is offering huge stock compensation packages to its top researchers and engineers. This has made them some of the wealthiest employees in Silicon Valley. However, these equity awards are also contributing to the company's massive operating losses and rapidly diluting existing shareholders.
Market pressure
OpenAI's compensation strategy amid industry competition
The intense AI arms race this summer has pushed frontier labs like OpenAI to hike employee pay. This was triggered by Meta CEO Mark Zuckerberg offering pay packages worth hundreds of millions, even up to $1 billion in rare cases, to top executives and researchers at rival companies. The aggressive recruitment drive saw over 20 OpenAI employees, including ChatGPT co-creator Shengjia Zhao, being lured away.
Future projections
OpenAI's financial outlook and policy changes
OpenAI's financial data, shared with investors over the summer, projected its stock-based compensation would rise by some $3 billion per year through 2030. The company also recently announced it would end a policy mandating employees to stay at OpenAI for six months before their equity vests. This change could lead to even higher compensation packages in the future.
Financial metrics
OpenAI's compensation as a percentage of revenue
OpenAI's compensation as a percentage of revenue was projected to hit 46% in 2025, the highest among the 18 companies analyzed by The Wall Street Journal. The only exception was Rivian, which didn't have any revenue before its IPO. For comparison, Palantir's stock-based compensation was 33% of its revenue before going public in 2020 while Google's and Facebook's were at 15% and 6%, respectively.