Tesla CEO Elon Musk made more than $10 billion in 2021 – meaning the world’s richest man is also the highest paid CEO on the planet.
Musk had topped the list for the fourth year in a row. Much of his pay packet is made up from various stock options, which have added $78 billion to his personal wealth, believed to be around $269 billion.
Musks payout is so vast that out of the top 14 CEO’s as listed by Bloomberg, the remaining 13 CEOs in the list following the Tesla chief total’s $6.3 billion – or just over half of what he makes.
Robert Scaringe, CEO of Rivian Automotive was way behind Musk but still with an enormous paycheck of $2.3 billion last year.
Apple CEO Tim Cook, who heads the most valuable and cash-rich company in the world, pulled in $853 million in 2021, while Peter Rawlinson CEO/CTO of California-based Lucid Motors earned $575 million.
Elon Musk was the highest paid CEO last year with more than $10 billion in earnings
Next highest paid chief executive was Robert Scaringe, CEO of Rivian Automotive, who made about fives times less than Musk with $2.3 billion
Nine-figure compensation packages were once rare but they appear to be on the increase.
The packages are often made up from salary, bonus, stock awards, stock option awards, deferred compensation and other components that include benefits and perks.
For some companies, big raises can occur when CEOs get a stock grant in one year as part of a multi-year grant.
Apple’s Tim Cook came in third place with $853 million in compensation
Peter Rawlinson CEO/CTO of California-based Lucid Motors earned $575 million, left. Tom Siebel CEO of software company C3.ai banked $343 million, right
The highest placed female CEO, Sue Nabi of global beauty company Coty, made $283m
In fifth place Tom Siebel CEO of software company C3.ai banked $343 million, while the highest placed female CEO, Sue Nabi of global beauty company Coty, made $283 million.
In 2023, once she has collected all the shares included in her package, she will own about 3% of the company.
‘Nabi is one of the beauty industry’s leading founder talents: a hugely respected business leader with an outstanding track record,’ the company said in a statement. ‘In order to attract a true entrepreneur like her, Coty needed to have an enticing equity scheme.’
From seventh place onwards, the numbers get a little closer together.
Joe Bae CEO of KKR private equity made $279 million in 2021 while Tomer Weingarten the CEO of cybersecurity firm SentinelOne earned $275 million, placing him eighth in the list.
At ninth, Alex Karp CEO of Palantir Technologies made $264 million while Sid Sijbrandij, the CEO of GitLab, both software companies rounded out the top ten with earnings of $263 million.
At ninth, Alex Karp CEO of Palantir Technologies, left, made $264m while Sid Sijbrandij, the CEO of GitLab, both software companies rounded out the top ten with earnings of $263 million
The top ten CEO’s sees a total compensation payout of more than $15 billion. More than 30 executives of public companies secured pay deals in excess of $100 million according to the Bloomberg Pay Index.
The value maybe less when the list for 2022 is compiled with the stock market taking a tumble during the first half of this year, interest rates rising and inflation soaring – all of which have a direct consequence on the pay packets of of such highly paid personnel.
Nevertheless, while the markets can ebb and flow, in general the pay of CEO’s continues to rise.
Chief executive officers are typically the highest paid employees in any business – sometimes making more than 1,000 times what an average employee earns.
‘It’s another version of ‘more for them and less for us, and it comes at a time when working people’s living standards have declined with every increase in the price of food, rent and gas,’ said Fred Redmond, secretary-treasurer of the American Federation of Labor and Congress of Industrial Organizations.
The AFL-CIO’s annual survey of executive pay described such exorbitant payout as ‘greedflation’ noting how the average salary for a S&P 500 CEO rose 18% in the past fiscal year to $18.3 million – some 324 times a typical worker at the same companies.
Overall, CEO pay is a tricky thing to explain.
Within the eight- and even nine-figure sums trumpeted for CEOs each year, just a small portion is actual cash.
Last year, only a little more than a quarter of compensation for the typical CEO at an S&P 500 company came from cash salary or bonus. At the very top of the rankings, cash can make up 1% or less of total compensation.
Instead, the majority of a CEO’s pay tends to come from grants of stock and grants of stock options, which give the CEO the opportunity to buy shares of stock in the future at a certain price.
That’s often by design, because shareholder advocates have pushed for CEO pay to be more closely aligned with their own returns.
Because of that, exactly how much a CEO is able to cash in will ultimately depend in part on the performance of the company — and the CEO.
‘There’s been such progress made in the past decade in getting pay and performance decisions correct,’ said Melissa Burek, a partner at Compensation Advisory Partners, a consulting firm that helps boards formulate executive pay. ‘I would say we have more acute awareness of these issues.’
For grants of stocks and options, the numbers listed in companies’ annual proxy statements reflect an estimate of how much they’re worth.
The people ultimately in charge of setting CEO pay are the ones on the company’s board of directors. Those directors are supposed to represent all of a company’s shareholders, who get some voice in the process.
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