US Top 500 Companies CEOs' Salaries Decrease for the First Time in 10 Years

Stock Option Value Drops Due to Sharp Stock Price Decline

Last year, the compensation of CEOs at the top 500 U.S. companies decreased for the first time in 10 years. This was influenced by a sharp decline in the value of stock options due to a drop in stock prices linked to business performance.

On the 15th (local time), The Wall Street Journal (WSJ) reported that corporate information research firm MyLogIQ analyzed the total compensation (including salary and stock option value) of CEOs of S&P 500 companies last year and found that the median was $14.5 million (approximately 1.94 billion KRW), down from $14.67 million the previous year. This marks the first decrease in total CEO compensation among the top 500 U.S. companies since 2012, a span of 10 years.

WSJ explained, "The reduction in CEO compensation among S&P 500 companies last year reflects business performance and stock price trends," adding that "two-thirds of all CEOs saw a decrease in the value of their stock options." On an annual basis, the S&P 500 index fell by 19.46% last year. Accordingly, two-thirds of the companies in the S&P 500 recorded negative total shareholder returns, reducing shareholder profits.

Sundar Pichai, CEO of Google.
Photo by AFP Yonhap News

However, despite worsening business performance, about half of the companies increased their CEOs' compensation. Even amid concerns of a recession and high-intensity tightening measures, the practice of securing one's own compensation thoroughly, often referred to as bubble salaries, remains prevalent.

Sundar Pichai, CEO of Google, topped the list with a compensation of $226 million (approximately 301.7 billion KRW) last year. Meanwhile, Google's net profit during this period sharply declined by 21% to $59.972 billion from $76.033 billion the previous year. The stock price, which was in the $120 range, also plunged nearly 22% to around $94.

Following CEO Pichai, Michael Rapino of Live Nation Entertainment received $139 million, Tim Cook of Apple $99.42 million, Peter Zaffino of AIG $75.31 million, and Hock Tan of Broadcom $60.61 million, ranking 2nd to 5th respectively.

Some CEOs had their compensation frozen. Sixteen CEOs (about 3.2%), including Elon Musk of Tesla and Warren Buffett, Chairman and CEO of Berkshire Hathaway, received the same level of compensation as the previous year. CEO Musk's compensation remained flat as the value of his stock options shrank by $10 billion last year. The stock option value, which was $65 billion at the end of 2021, was revalued downward as Tesla's stock price fell nearly 70% over the past year.

Meanwhile, among the top 500 companies, there were 28 female CEOs. Among them, Julie Sweet, CEO of consulting firm Accenture, was the only female CEO to rank within the top 20, receiving $3.37 million (18th place).