Tech CEO Salaries Hit Record High in 2020—Even for Those Who Made $0

Elon Musk ranked dead last with a salary of $0. That doesn't mean he was underpaid, though.

Tesla and SpaceX CEO Elon Musk leaves the Westhafen Event & Convention Center after attending the CDU/CSU faction meeting on September 2, 2020 in Berlin, Germany. Filip Singer-Pool/Getty Images

The year 2020 was devastating for some businesses and a fruitful one for others. But no matter which industry, most chief executives of America’s largest companies had a great year, with their compensation reaching a record high despite stagnating employee wages and mixed return for shareholders.

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The median pay for CEOs running S&P 500 (SPX) companies reached $13.4 million last year, according to The Wall Street Journal‘s annual analysis of public company executive compensation released Tuesday morning. The report looked at CEO pay at more than 400 companies in the S&P 500 index that have filed proxy statements with the SEC. The executive earnings were compared against median employee salary at these companies and their one-year shareholder return, calculated as change in share price plus dividends.

Paycom Software founder and CEO Chad Richison tops the Journal‘s list with a pay package valued at $211 million, an eye-popping 900 percent jump from 2019, thanks to equity grants awarded based on a 71 percent shareholder return of 2020.

Second in place was Robert Kotick, CEO of the video game maker Activision Blizzard, who earned a total compensation of $155 million, also bolstered by strong shareholder return (57 percent). Kotick was closely trailed by Regeneron CEO Leonard Schleifer, who earned $135 million. Regeneron became a household name in 2020 because of its cocktail antibody drug for treating COVID-19.

Eleven of the 25 best-performing companies in the Journal‘s analysis were tech firms. (That didn’t include Tesla (TSLA), which is categorized by S&P as an automobile company.) Yet, their CEOs were nowhere to be seen among the top ranks.

Apple (AAPL) CEO Tim Cook, for example, was number 171 ($14.8 million) on the list, despite Apple ranking eighth among 416 companies in shareholder return. Etsy CEO Josh Silverman was 410th, while Etsy’s shareholder return jumped 302 percent in 2020. In an extreme example, Tesla CEO Elon Musk ranked dead last with a salary of $0. But his electric carmaker produced a higher shareholder return than anyone else, at 745 percent.

That doesn’t mean tech CEOs are underpaid, though. Outside his nonexistent standard compensation, Musk raked in $32 billion in stock options last year as part of his landmark 2018 compensation package. Under the controversial plan, Musk is eligible for a total stock payout worth $56 billion over 10 years. On April 30, he unlocked the latest tranche of payment worth $32 billion.

Also among the lowest-paid CEOs was Twitter’s Jack Dorsey, who paid himself a nominal salary of $1.40 (one penny for each character in Twitter’s 140-character limit) in 2020. The eccentric entrepreneur also famously rejects bonuses. But no need to worry about his financial situation. Dorsey’s ownership in Twitter and Square is worth $12.5 billion, according to Forbes. When in need of actual money, all he needs to do is sell some of those equities and bag the cash.

Not including stock option payouts and other unaccountable bonuses, S&P 500 CEOs on average received a pay raise of 5 percent last year, outpacing their employee pay as well as national wage. Seven CEOs among 416 surveyed made more than $50 million last year, compared with only two in 2019. And only 24 CEOs made less than $5 million.


Tech CEO Salaries Hit Record High in 2020—Even for Those Who Made $0