Broadcom CEO Hock Tan has emerged as the highest-paid CEO in the United States for the year 2023, with a compensation package valued at $162 million, as reported by The Wall Street Journal (WSJ). Tan’s pay is heavily reliant on stock awards totaling $160.5 million, which are contingent on Broadcom’s stock performance meeting certain targets by 2025 and Tan staying in his position for the next five years.
Broadcom, a semiconductor company that generated $35.82 billion in revenue in 2023, has witnessed a 27% increase in its share price this year and an impressive 106% surge in the last twelve months. This surge in share price has led to a significant rise in the company’s market capitalization to $655 billion. Tan’s compensation structure includes no additional equity bonuses or cash until the end of the specified five-year period, aiming to ensure his loyalty and align his interests with those of the shareholders.
Following Tan in the ranking of top earners for 2023 is Nikesh Arora, the CEO of Palo Alto Networks, who earned $151 million primarily from stock grants that will cover the next three years. Under Arora’s leadership since 2018, Palo Alto Networks has become a key player in the cybersecurity industry, serving 85 of the Fortune 100 companies. Third on the list is Steve Schwarzman of Blackstone, who earned $120 million mainly through stock awards. Despite his significant earnings, Schwarzman’s total net salary, including dividends, decreased from $1.2 billion in 2022 to $896.7 million in 2023.
The analysis also highlights a noticeable gender disparity among the highest-paid CEOs, with no women making it to the top 25 earners. The highest-paid woman, Julie Sweet of Accenture, ranks 28th with earnings just over $30 million, closely followed by Lisa Su of Advanced Micro Devices. While the number of female CEOs at S&P 500 companies has increased from 24 in 2020 to 31 in 2023, there is still limited representation of women at the highest pay echelons.
Overall, the trend of rising CEO compensation is evident, with average pay for top executives increasing from $14.5 million in 2022 to $15.7 million in 2023. Performance-based compensation structures, particularly through stock awards, are driving this trend, aligning executives’ interests with those of the shareholders.
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