It’s no secret that the CEOs of the world’s biggest tech companies make a lot of money, but it’s even more surprising to see the significant income disparity between them.
Despite Microsoft and Apple’s impressive market capitalizations, their CEOs aren’t even among the top five highest-paid US tech companies.
Sundar Pichai won
In the small world of tech giants, Alphabet/Google CEO Sundar Pichai was the highest paid in 2022. His remuneration that year was $226 million, or 800 times the average salary of employees (already very well paid) who work at the company. But this figure should be put into perspective.
Indeed, most of Sundar Pichai’s compensation in 2022 was in the form of stock, which was $218 million out of $226 million. The actual salary of Alphabet’s CEO will be between 6 to 8 million. Remuneration that employees are finding hard to come by as Google cuts thousands of positions in 2023, and the trend doesn’t seem to be reversing.
According to documents filed by Google with the SEC, Google’s CEO-to-employee pay ratio was 27:1 in 2020, 21:1 in 2022 and 808:1 in 2022. A big difference explained by the three-year bonus mechanism signed by Sundar Pichai.
Here’s an example to illustrate the mechanism: A company’s board of directors issues a $150 option on a stock that is currently worth $50. If the CEO manages to increase the stock to $150 within the time limit (three years in Sundar Pichai’s example), then he gets paid for these options (stock options), thus increasing his income this year. – There.
Income of other tech CEOs
Sundar Pichai is indeed on the first place in income in 2022, but his colleagues are not excluded:
- Sundar Pichai, CEO of Alphabet: $225.9 million
- Barry McCarthy, CEO of Peloton: $168 million
- George Kurtz, CEO of CrowdStrike: $147.7 million
- Safra Catz, CEO of Oracle: $147.7 million
- Douglas Ingram, CEO of Sarepta Therapeutics: $124.9 million
- Tim Cook, Apple CEO: $99.4 million
- Hawk E. Tan, CEO of Broadcom: $60.6 million
- Mark Anderson, CEO of Alteryx: $57.2 million
- Satya Nadella, CEO of Microsoft: $54.9 million
- Reed Hastings, co-CEO of Netflix: $51.07 million
- Netflix Co-CEO Ted Sarandos: $50.3 million
If you are surprised to see Microsoft’s Satya Nadella and Apple’s Tim Cook in 6th and 9th place, even though they are at the top of the companies with the largest capitalization in the world, this is easily explained. Indeed, CEO stock gains are not always calculated over three years, as in Sundar Pichai’s case.
On the same topic: 10 massive layoff plans that mark the slaughter in tech
This is for example the case of Tim Cook whose income fluctuates less. Thus, the CEO of Apple received about 100 million dollars in 2023 and a little more than 63 million in 2023, which is a ratio of 672: 1 compared to the average salary of the company’s employees. Satya Nadella earned less in 2023 than in 2022, but with a lower CEO/employee ratio of 250:1.
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Source:
Android Authority
