Reporter of the Economic Business: Wen Qiao Reporter of the Economic Business Business: Lan Suying
Recently, Bloomberg recently released a list of US company executive compensation in 2021. List data shows that Tesla (TSLA, stock price of US$869.74, market value of US$908.435 billion) founder Elon Musk received salary worth more than US$10.077 billion (about RMB 69 billion) in 2021, ranking first. This is also the fourth consecutive year that Musk has topped the list.
It is worth noting that Musk's salary last year was nearly 4.5 times that of the second place. Moreover, among the top 14 people on the list, the total salary of the remaining 13 people has just exceeded 60% of Musk's salary.
According to the salary list, the second place is electric vehicle Rivan (RIVN, stock price of $33.06, market value of $30.289 billion), CEO Robert Scarlinger, whose salary is $2.29 billion. The third to fifth executives are Apple (AAPL, stock price of $167.57, market value of $2.69 trillion) CEO Tim Cook (salary value of $853 million), electric vehicle Lucid (LCID, stock price of $16.1, market value of $26.932 billion) CEO Peter Rollinson (salary value of $576 million) and software company C3.ai (AI, stock price of $19.11, market value of $2.048 billion) CEO Tom Heber (salary value of $344 million).
Image source: Bloomberg
In addition, according to the list, executives of more than 30 listed companies have salaries worth more than $100 million.
reporter noticed that the salary list divides executive compensation into five components, namely salary, bonus, stock rewards, option incentives and allowances.
It is worth mentioning that most of the salary composition of Musk and Scarlinger is stock option incentives, and Hebrew's salary composition includes a small part of option incentives. The main components of , Cook, and Rollinson's salary are salary, bonuses, and stock rewards, and do not include stock option incentives.
According to media reports, overall, more than half of the salary of the S&P 500 component company is issued through equity . If stock options are added, this ratio will reach more than 70%. Since 2018, these stock options have added about $78 billion to Musk's personal wealth. According to the Bloomberg Billionaire real-time ranking, Musk's current personal net wealth is US$255 billion. The reason why
is gradually becoming more popular is that company shareholders and board of directors want to link the compensation received by executives to stock option returns, which means that in most cases, the more capable the CEO is, he and the shareholders can earn more.
Take Tesla as an example. In 2021, the company's stock price increased by more than 55%. Judging from the company's 2021 financial report, Tesla's delivery volume reached about 940,000 vehicles in 2021, and increased by 387% year-on-year, setting a record in the history of electric vehicles at that time. The company's total revenue in 2021 was US$53.823 billion, net profit was US$13.606 billion, and gross profit growth rate exceeded 105%.
Tesla said in its financial report 2021 is the company's breakthrough year. With Tesla's strong profitability and stock growth momentum, it is naturally not surprising that Musk's high salary value is also.
According to Bloomberg, although current high inflation forces consumers to reconsider spending and stock markets have also fallen sharply, long-term observers point out that even though economic downturns occur frequently, CEO pay will only be on an upward trend in history.
American Federation of Labor and the Federation of Industry Unions (AFL-CIO) Annual Executive Compensation Survey pointed out that the average salary of CEOs of S&P 500 Index companies increased by 18% in the previous fiscal year to $18.3 million, 324 times the income of ordinary employees of these companies. This proportion has jumped 23% since the start of the COVID-19 pandemic.
However, some consultants who provide compensation advice for the company also pointed out that the increase in executives' compensation largely reflects the company's stock price and performance. At least for now, few executives have been unscathed in the stock market plunge that began this year. If the downturn continues, some people may only receive a small portion of the rewards in the contract.
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