Palantir, the controversial data analytics company founded by Peter Thiel, is making a big change to the bonuses it pays employees.
Instead of getting cash bonuses, Palantir employees will receive restricted stock units, according to a memo obtained by Business Insider.
The change means that employees will not be able to cash out their bonuses until Palantir goes public or is acquired by another organization.
Visit Business Insider’s homepage for more stories.
Palantir is phasing out cash bonuses for employees following a company review of how it spends its resources, according to an internal memo obtained by Business Insider.
The secretive data analytics company, founded by conservative billionaire Peter Thiel in 2003, will issue this year’s bonuses half in cash and half in Restricted Stock Units, director Khan Tasinga said in the email to staff on Friday. By 2021, company bonuses will be entirely RSUs, according to the email.
The change is likely to cause ripples among Palantir’s ranks of employees, since it means their bonuses will effectively be worthless until the privately-held company, last valued at $20 billion in 2015, lists its shares on the stock market or is acquired.
“Palantir has entered a new stage where we need to not only continue focusing on growth, but also to ensure that growth is long-term sustainable as we march toward a successful IPO,” Palantir’s Tasinga said in the email. “Doing so requires revising assumptions and reevaluating how we can best use company resources to advance the business while supporting our people.”
Palantir declined to comment.
: Insiders say a Palantir exec claimed profitability and compared Project Maven to the nuclear bomb in January all-hands
The change comes at a time of financial uncertainty for the company, which was widely viewed as an IPO candidate for 2019. In June, Palantir cofounder Joe Lonsdale told an audience that he thinks the company is years away from going public, and in September, Bloomberg reported that Palantir was looking to raise another round of private funding, though nothing has been announced.
Palantir told employees in January that it had achieved profitability, though it’s not clear what metric the company used for its definition of profitability, Business Insider previously reported. It has beefed up its revenues through expensive government contracts working with the Department of Defense on its artificial intelligence for drones endeavor, Project Maven, as well as well as an $800 million contract to build software for the Army.
Employees have struggled to sell equity
RSUs have become a contentious issue at the 17-year-old company after it stopped issuing vesting-dependent stock options altogether in early 2019, according to a former employee. For those who joined Palantir before 2019, much of their compensation was composed of these stock options, leaving many current and former employees with hundreds of thousands of dollars in equity, but few opportunities to sell it.
“Palantir is actually one of the most well-oiled machines for secondary shares in the private markets. They have been very supportive of their shareholder base and their desire to sell,” said Andrea …read more
Source:: Business Insider