Elon Musk breaks CEO pay record

2 min read Original article ↗

Cate Chapman

Cate Chapman

Published May 24, 2019

Labor may be tight. But if compensation is any guide, it’s the chief executives who are in demand. The New York Times reports that remuneration for CEOs grew about 100% faster in 2018 than the wage of the average worker, who earned an extra 84 cents an hour. Topping out the execs: Tesla’s Elon Musk, whose $2.3 billion package is the highest ever recorded (but also requires Tesla “to reach highly ambitious milestones for Mr. Musk to receive any of it"). No FAANG companies made the top five, and the other execs who did trailed Musk by more than $2 billion each:

  • Discovery CEO David Zaslav, $129 million
  • Palo Alto Networks CEO Nikesh Arora, $125 million
  • Oracle co-CEO Safra A. Catz, $108 million
  • Oracle co-CEO Mark Hurd, $108 million 

Editors’ Picks

  1. So, Elon Musk was granted a $2.3B compensation package in 2018 (Over $2B more than any other CEO in the US) while his companies are losing money and burning cash. Now, it's true that most of this compensation will not pay off for Mr. Musk unless the enterprise value of Tesla goes up dramatically higher than it is today because it was granted as options, which arguably aligns his interests with that of shareholders. But still, the award seems well out of line with the underlying performance of his companies as businesses. Maybe he should make at least some of the money first -- you know, profit, free cash flow, EPS, etc.....before accepting the largest compensation package of any CEO in the U.S.....? #commonsense

    It’s Never Been Easier to Be a C.E.O., and the Pay Keeps Rising (Published 2019) https://www.nytimes.com

  4. A wonderful illustration of the ongoing failures in corporate governance. And this piece raises a question I hear ever more frequently discussed: can capitalism survive capitalists, or in this case, CEOs? As I showed in a paper (When Does Money Make Money More Important?) co-authored with Sanford DeVoe and Byron Lee published a while ago (https://lnkd.in/gcQkFrx), money, because and when it becomes a signal of worth and status, actually becomes more important (there is not much evidence of diminishing returns) the more people have. There is also abundant research illustrating how disconnected CEO pay is from performance.

    It’s Never Been Easier to Be a C.E.O., and the Pay Keeps Rising https://www.nytimes.com