OpenAI has emerged as a standout in the technology sector, not just for its artificial intelligence (AI) programs, but also for how generously it compensates
its workforce. According to a report by The Wall Street Journal, the company has set a new benchmark for startup pay, with stock-based compensation averaging roughly $1.5 million per employee, a level rarely seen before a company goes public. With a workforce of around 4,000 employees, OpenAI’s compensation structure is unprecedented in scale. The Wall Street Journal notes that Google’s stock-based pay in 2003, just a year before its IPO, was more than seven times lower than what OpenAI offers today. Using Equilar data compiled by the publication, the analysis also found that OpenAI’s average payouts are about 34 times higher than those received by employees at 18 major technology firms in the year before their IPOs. The High Cost of Winning The AI Talent Race The soaring compensation reflects an increasingly fierce battle for AI researchers and engineers. To retain its competitive edge, OpenAI has steadily raised equity awards for key staff, turning some employees into among the wealthiest individuals in Silicon Valley. However, these payouts come with trade-offs. Rising stock-based compensation is adding to operating losses and diluting the stakes of existing shareholders. Competition escalated further over the summer, when Meta CEO Mark Zuckerberg reportedly dangled pay packages worth hundreds of millions of dollars, and in rare instances up to $1 billion, to lure top AI experts. That hiring push reportedly drew more than 20 employees away from OpenAI, including ChatGPT co-creator Shengjia Zhao. In response, OpenAI issued one-time bonuses to selected research and engineering staff, with some payments running into the millions, states the report. Bigger Numbers Ahead Investor documents suggest the trend is far from over as OpenAI expects stock-based compensation to continue rising, potentially touching $3 billion annually by 2030. The company has also scrapped an earlier rule that required employees to stay for six months before equity vested, a move likely to further inflate total pay. By 2025, stock-based compensation is projected to account for 46 per cent of OpenAI’s revenue, a proportion exceeded in recent history only by Rivian, which reported no revenue in its pre-IPO year, states the report. Alongside these payouts, OpenAI is creating senior roles with equally striking packages. Founder Sam Altman recently announced a new position, “Head of Preparedness,” offering $555,000 a year plus equity. Describing the role, Altman said, “This will be a stressful job, and you'll jump into the deep end pretty much immediately.” The position will focus on managing risks from rapidly advancing AI systems while helping cybersecurity teams leverage powerful tools without enabling misuse.
