On December 20, local time, according to media reports, electric car giant Tesla told some employees that the company will not offer performance-based equity awards this year。

Tesla did not explain the reason for the change, but there are employees from different departments within Tesla who believe that the company's move is a common phenomenon.。However, they also mentioned that workers' cost-of-living allowances remained slightly increased and basic wages were adjusted.。

During the annual performance review, employees typically receive salary adjustments on top of their existing equity as well as performance-based stock awards。But this year, employees say, even those who do well aren't getting performance bonuses。However, in order to keep total compensation competitive, some Tesla employees will still receive stock "updates" after the end of the four-year exercise cycle.。

Tesla employs 140,000 people worldwide, and it's unclear if this is a special case or part of a major shift in Tesla's compensation philosophy to take a more targeted approach to equity grants.。

Tesla's equity award has long been a "magic weapon" to motivate employees to choose Tesla over competitors.。New hires typically receive a base salary and a stock award with a four-year strike cycle, meaning they could lose out on huge rewards if they leave Tesla within a short period of time.。

Tesla CEO Elon Musk has long emphasized the importance of employee stock ownership, rewards that allow Tesla to keep its total salary high while retaining cash.。

Last month, Musk said at an event: "The challenge for us is how do we retain the best people to do the hard work of car manufacturing when there are six other opportunities that are easier to complete?？We will certainly do everything we can to ensure the success of everyone。We'll give everyone stock options。"

In addition, Musk believes that this stock compensation method has helped Tesla "resist" the union movement to a certain extent.。

However, with the pressure from the United Auto Workers (UAW), Tesla had to make more concessions.。On Tuesday (December 19), it was reported that Tesla plans to increase the wages of some fixed hourly workers at its Nevada battery factory by 10% or more in January next year。

The UAW had held a weeks-long strike against Detroit's auto "Big Three" this year.。Later, in an effort to stop the strike, Ford, General Motors and Stellantis reached historic contracts with their respective unions.。After the victory, the UAW began calling on about 150,000 auto workers at Tesla, Toyota, Honda, Rivian and Lucid to consider joining a union.。

Tesla raises wages for workers to 'discourage' workers from joining unions。In Europe, Tesla is also facing increasing pressure from unions in Sweden, Denmark, Finland and Norway over its refusal to sign collective agreements with unions.。

It's worth noting that Tesla is not the only automaker to raise wages after the UAW strike, and companies such as Hyundai Motor have also raised workers' wages recently.。

Although Tesla's share price surged more than 130% in 2023, Tesla has cut car prices several times this year in order to maintain sales momentum, which has directly led to its vehicle gross margin falling below 20%。In the third quarter of this year, Tesla's auto gross margin fell to 16.3%, which peaked in the fourth quarter of 2021 and is close to 30%。

Musk has repeatedly expressed his concerns about the global economy this year.。He has also publicly criticized the Fed's high interest rate policy several times.。Tesla Chief Financial Officer Vaibhav Taneja said on the third-quarter earnings call that Tesla is focusing on cutting costs in response to the challenging economic environment.。