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Jensen Huang offers an investment plan in NVIDIA for its employees with very advantageous conditions
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NVIDIA is already worth more than Google and Amazon. This increase in the value of its shares has also had an impact on the employees’ savings.
In the world of large corporations, financial success stories are usually reserved for the founders of the companies, or at most for the senior managers who take over. We rarely find employees who have become millionaires to work in a certain company.
However, Jensen Huang’s peculiar management system at the head of NVIDIA has also made his most veteran employees millionaires, which has generated a bond of loyalty with the manager.
The writer and journalist of Bloomberg specialized in NVIDIA Tae Kim, published a tweet echoing the story of an intermediate position at NVIDIA shows us that wealth is not exclusive to the company’s top management, but that the financial bonanza that NVIDIA has experienced in recent years, It has also had an impact on its employees.
A comfortable retirement or debt hell
This employee, far from being a prominent engineer, managed to amass a fortune of $62 million simply by taking full advantage of the employee stock purchase plan (ESPP). Employee Stock Purchase Plan)which the company has been offering for the last 18 years.
As the name suggests, the NVIDIA Employee Stock Purchase Plan allows employees to allocate between 10% and 15% of their salary to purchase company stock. with a 15% discount. That is, it turns employees into shareholders. An excellent way to encourage employee commitment to the company.
The employee in question never sold any shares during his time at the company, demonstrating discipline and long-term investment vision. In the end, his patience and strategy paid off, and the excellent financial performance of NVIDIA stock has turned his years as an employee into a million-dollar cushion for his retirement.
On the other hand, history has not been so favorable for everyone. Tae Kim also tells the other side of the same incentive policy, with the case of an NVIDIA engineer who also took advantage of the investment opportunity that the company offered him, but who had to sell his participation to cover the losses caused by a bad investment.
This engineer had used his margin account, where securities are leveraged to acquire other financial assets. The 90% drop in other stocks forced him to sacrifice one million NVIDIA shares to offset the losses of the rest, resulting in an error valued at 500 million of dollars.
The story of NVIDIA and its employees becoming millionaires due to the spectacular rise in the value of their shares is a reminder that NVIDIA’s ESPP has proven to be a valuable tool to involve its employees in the company, it is still a financial instrument with the risks it entails. NVIDIA’s trajectory has been upward, so those employees who have simply maintained their positions have become incredibly rich.
However, they are subject to the same fate as their companies and the price of their shares will not always depend on their work, as is happening to the shares of former President Trump’s social network. If in the end NVIDIA’s financial situation turns out to be a bubble as they point out from Financial Timesthe retirement cushion for these employees could be a little softer.
In Xataka | NVIDIA has just joined the exclusive club of companies worth more than a trillion dollars. Thanks to AI, of course
Image | Wikimedia Commons (NVIDIA, Gal Rosen)
