USA 
United Kingdom
OpenAI told staff this past week that it was ending a compensation policy that required employees to remain at the company for at least six months before they were entitled to their equity bonus.
The change to the 'vesting cliff' was announced by Applications Chief Fidji Simo, according to reports.
The decision is designed to encourage new employees to take risks without concern that they could be dismissed before accessing their first portion of equity. OpenAI had already shortened its vesting period to six months from the industry standard of 12 months in April.
The change highlights how competition for technical talent across the AI sector is prompting companies to reconsider long-standing compensation structures. Tech companies typically impose a one-year vesting cliff to avoid granting stock to employees who leave quickly or fail to work out.
Talent war reshapes pay expectations
The AI hiring market has become increasingly aggressive, with companies including Meta Platforms, Google and Anthropic offering compensation packages that can be worth $100million or more. Researchers and engineers have gained leverage to demand more attractive terms and, in many cases, have been willing to leave roles that do not meet expectations.
OpenAI is already distributing significantly more stock-based compensation than many other technology companies. Financial documents sent to investors and reviewed by The Wall Street Journal show the company expects to spend $6 billion this year on stock-based compensation, nearly half of its projected revenue.
Some tech investors have privately criticized the growing scale of equity compensation at fast-growing AI startups, arguing that it reduces shareholder returns.
“Companies that are needing to be more competitive are dropping the traditional first-year vesting cliff,” said Zaheer Mohiuddin, co-founder of Levels.fyi, a platform that tracks technology compensation.
Competitors adjust amid retention challenges
OpenAI’s move follows similar changes by competitors. Elon Musk’s xAI made a comparable adjustment in the late summer, shortening the vesting period for new hires. xAI did not respond to requests for comment.
In August, after Meta Chief Executive Mark Zuckerberg launched a wide-ranging recruitment push targeting OpenAI employees, OpenAI awarded one-time bonuses to some of its top researchers and engineers. Some employees received millions of dollars, The Wall Street Journal reported.
At xAI earlier this year, hiring managers faced increasing difficulty persuading candidates to interview. Facing departures and reputational issues, the company quietly shortened its vesting period during the third quarter.
Musk, who has said he works “every waking hour,” is known for expecting long hours from employees. Since the summer, xAI has lost leaders overseeing X, legal, finance and engineering. One legal executive announced his departure on LinkedIn with a meme of a man shoveling coal.
Recruiting challenges were compounded by public controversies, including antisemitic posts published by the Grok chatbot and the launch of Ani, an animated chatbot that deterred some job candidates. People involved in hiring said the rate at which recruits accepted xAI offers improved after the vesting change.
