Some Meta employees claim they’re not getting promised severance
Anwar Almojarkesh (L) and Alan Chalabi (R) from England take a photo at Meta (formerly Facebook) corporate headquarters in Menlo Park, California on November 9, 2022.
Josh Edelson | AFP | Getty Images
A group of Meta workers who joined the company via a corporate training program say they are receiving inferior severance packages compared to other workers who were recently laid off.
The employees are members of Meta’s Sourcer Development Program, intended to help workers from diverse backgrounds obtain careers in corporate technology recruiting. The Sourcer Development Program is part of Meta’s Pathways program, which helps people with non-traditional professional backgrounds obtain apprenticeships at the social networking giant for various roles.
Nearly every member of Meta’s Sourcer Development Program, more than 60 workers, was let go from the company as part of its massive layoff of more 11,000 workers earlier in November, multiple Meta employees told CNBC.
Several members of Meta’s Sourcer Development Program told CNBC they joined Meta in April as part of the company’s latest cohort. The employees said they were not contract workers and instead were categorized as short-term employees that received all the benefits of full-time employees, including insurance and retirement funds but not corporate stock packages. After completing the 12-month program, the employees would then be converted to full-time employees if they met the necessary criteria.
In a letter sent to Meta employees during the layoffs and posted online, Meta CEO Mark Zuckerberg said that the company would pay severance of 16 weeks of base pay plus two additional weeks for every year of service, with no cap. Zuckerberg added that Meta would cover the cost of healthcare for people and their families for six months.
But members of Meta’s Sourcer Development Program said they are only receiving 8 weeks of base pay and three months of COBRA.
The workers said it’s unclear why they are receiving lower severance packages than their colleagues, considering they were full-time employees and not contract staff.
On Nov. 16, the impacted workers sent a letter to Zuckerberg and other Meta executives, including Meta’s head of people Lori Goler and chief operating officer Javier Olivan, informing Meta management about their severance situation and asking for help resolving the issue.
“Even our former managers insisted we were confused and that all the information they were getting was that we were offered 16 weeks of pay and 6 months of health insurance,” the group wrote in the letter.
They later added, “Leadership may not have been aware that the last SDP class, which began in April 2022, was repeatedly assured by their leadership that any potential layoff would not impact their current employment but would likely impact the company’s ability to consider them for a full-time role.”
The impacted Meta workers said they have not received any replies from Meta’s human resources and management staff explaining their situation.
“During a Q&A recently, Lori even stated that the Pathways Programs would not be impacted,” the letter said. “It was based on this information that we were repeatedly assured by our managers that we didn’t need to start applying to positions outside of the company.”
“We understand that we are employed at-will and that business needs are always evolving and changing, but we couldn’t help but feel maybe there had been a mistake,” the group added.
The workers told CNBC that Meta has yet to reply to their letter, but has sent some members gift packages intended to congratulate them for completing the Sourcer Development Program.
“We hope that Meta offering only 8 weeks of base pay and 3 months of COBRA to the impacted April 2023 SDP class is a clerical mistake and was not done with intentional disregard or callousness,” the workers said in the letter.
Facebook did not immediately respond to a request for comment.
Lora Kolodny contributed to this report.
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Dado Ruvic | Reuters
Dina Powell McCormick, who was a member of President Donald Trump’s first administration, has resigned from Meta’s board of directors.
Powell McCormick, who previously spent 16 years working at Goldman Sachs, notified Meta of her resignation on Friday, according to a filing with the SEC. The filing did not disclose why McCormick was stepping down from Meta’s board, but said her resignation was effective immediately.
Meta does not plan on replacing her board role, according to a person familiar with the matter who asked not to be named due to confidentiality. Powell McCormick is considering a potential strategic advisory role with Meta, but nothing has been decided, the person said.
Powell McCormick joined Meta’s board in April along with Stripe co-founder and CEO Patrick Collison. Meta CEO Mark Zuckerberg said in a statement at the time that the two executives “bring a lot of experience supporting businesses and entrepreneurs to our board.”
Powell McCormick served as a deputy national security advisor to President Trump during his first stint in office and was also an assistant secretary of state during President George W. Bush’s administration.
She is married to Sen. Dave McCormick, R-Pa, who took office in January.
Powell McCormick is the vice chair, president and head of global client services at BDT & MSD Partners, which formed in 2023 after the merchant bank BDT combined with Michael Dell’s investment firm MSD.
With her departure, Meta now has 14 board members, including UFC CEO Dana White, Broadcom CEO Hock Tan and former Enron executive John Arnold.
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Technology
Musk’s $56 billion Tesla pay package must be restored as court rules cancellation was too extreme
Elon Musk‘s 2018 CEO pay package from Tesla, worth some $56 billion when it vested, must be restored, the Delaware Supreme Court ruled Friday.
“We reverse the Court of Chancery’s rescission remedy and award $1 in nominal damages,” the judges wrote in their opinion.
In the decision, the Delaware Supreme Court judges said a lower court’s decision to cancel Musk’s 2018 pay plan was too extreme a remedy and that the lower court did not give Tesla a chance to say what a fair compensation ought to be.
The decision on the appeal in this case, known as Tornetta v. Musk, likely ends the yearslong fight over Musk’s record-setting compensation.
Musk’s net worth is currently estimated at around $679.4 billion, according to the Forbes Real Time Billionaires List.
Dorothy Lund, a professor at Columbia Law School, told CNBC that while the Friday opinion may restore the 2018 pay plan for Musk, it leaves the rest of the lower court’s decision unaddressed and intact.
“The court had previously decided that Musk was a controlling shareholder of Tesla and that the Tesla board and he arranged an unfair pay plan for him,” she said. “None of that was reversed in this decision.”
“We are proud to have participated in the historic verdict below, calling to account the Tesla board and its largest stockholder for their breaches of fiduciary duty,” lawyers representing plaintiff Richard J. Tornetta said in an e-mailed statement.
Tesla did not immediately respond to requests for comment.
The Delaware Supreme Court issued the order per curiam with no single judge taking credit for writing the opinion and no dissent noted.
Musk’s 2018 CEO pay package from Tesla, comprised of 12 milestone-based tranches of stock, was unprecedented at the time it was proposed. After it was granted, the pay plan made Musk the wealthiest individual in the world.
Tesla shareholder Tornetta sued Tesla, filing a derivative action in 2018, accusing Musk and the company’s board of a breach of their fiduciary duties.
Delaware’s business-specialized Court of Chancery decided in January 2024 that the pay plan was improperly granted and ordered it to be rescinded.
In her decision, Chancellor Kathaleen McCormick also found that Musk “controlled Tesla,” and that the process leading to the board’s approval of his 2018 pay plan was “deeply flawed.”
Among other things, she found the Tesla board did not disclose all the material information they should have to investors before asking them to vote on and approve the plan.
After the earlier Tornetta ruling, Musk moved Tesla’s site of incorporation out of Delaware, bashed McCormick by name in posts on his social network X, formerly Twitter, where he has tens of millions of followers, and called for other entrepreneurs to reincorporate outside of the state.
Tesla also attempted to “ratify” the 2018 CEO pay plan by holding a second vote with shareholders in 2024.
In November, Tesla shareholders voted to approve an even larger CEO compensation plan for Musk.
The 2025 pay plan consists of 12 tranches of shares to be granted to the CEO if Tesla hits certain milestones over the next decade and is worth about $1 trillion in total. The new plan could also increase Musk’s voting power over the company from around 13% today to around 25%.
Shareholders had also approved a plan to replace Musk’s 2018 CEO pay if the Tornetta decision was upheld on appeal. That plan is now nullified.
As CNBC previously reported, a law firm that currently represents Tesla in this appeal penned a bill to overhaul corporate law in Delaware earlier this year. The bill was passed by the Delaware legislature in March, and if it had applied retroactively, it could have affected the outcome of this case.
Read the Delaware Supreme Court’s ruling here.
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