In other words, the CEO did not merit such pay as he had not earned it. The shareholders argued, by contrast, that Tesla would have achieved many of the milestones anyway, regardless of Musk’s performance. As with many packages, the pay was in company shares, not cash, with Musk receiving batches of stock as he hit predetermined milestones – the higher Tesla’s stock prices climbed, the more its CEO stood to collect the assumption being that he was driving the rise in share price. At around $55 billion (yes, billion), it was by far the largest executive remuneration package in corporate history. It was no surprise that Musk’s pay package should hit the headlines. The package was so generous that it prompted a group of Apple investors to call for shareholders to vote against the pay award, arguing that half of it lacked “performance criteria”.Įlon Musk found himself not only the subject of headlines for the 2018 pay package he received as Tesla’s CEO, but the defendant in a class-action suit by shareholders alleging that Tesla’s board of directors was unduly influenced by Musk and had failed to disclose crucial information about the deal to shareholders, who then approved it. Apple CEO Tim Cook likewise found himself the subject of shareholder disapproval in 2021 following the disclosure that his total remuneration, at $98.7 million, equated to 1,447 times that of the average company employee. The company’s shareholders certainly felt that Jassy didn't deserve his monster pay packet, with nearly half saying they thought it was overpayment. Amazon’s CEO Andy Jassy, for example, attracted unwanted headlines in 2021 when it was revealed that his salary of $212 million was 6,474 times the median pay of his employees. The leaders of the world’s largest companies tend to be the subject of scrutiny – and scepticism – when it comes to pay. May 2022, for example, the Financial Times ran a story entitled “UK CEO pay recovers to pre-Covid levels despite cost of living crisis” which stated that pay for top British bosses had “bounced back to pre-coronavirus levels as company boards shed pandemic-era pay restraint and cashed in on bonus plans set during the economic dislocation caused by Covid-19.” CEO scrutiny More recently, we saw it attract controversy in the wake of the Covid-19 pandemic. The issue of CEO compensation is hardly new, dating at least as far back as the 1980s and the age of “greed is good”. Pick up The Wall Street Journal or Forbes magazine or any of the world’s business press on any day and there is a good chance you will see a feature questioning whether CEOs of large companies deserve the pay they get.
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