Broadcom’s CEO, Hock Tan, has emerged as the highest-paid CEO in America for 2023. According to a recent analysis by The Wall Street Journal (WSJ), Tan’s compensation package for the year was a staggering $162 million. This amount, however, is conditional on Broadcom’s stock performance reaching specific targets by 2025, and Tan remaining in his role for the next five years.
Performance-Based Pay Structures
Hock Tan’s compensation largely stems from stock awards valued at $160.5 million. Broadcom has clarified that Tan will not receive any further equity or cash bonuses until the five-year period is over, ensuring his loyalty and aligning his incentives with shareholder interests. The semiconductor giant, which reported revenues of $35.82 billion in 2023, has seen its stock price soar by 27% this year and an impressive 106% over the past twelve months. This surge in stock price has significantly boosted the company’s market capitalization to $655 billion.
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Top Earners of 2023
Tan’s leadership at Broadcom, which he has helmed since 2006, has seen the company expand through strategic acquisitions, including the $69 billion acquisition of VMware in 2023. This substantial deal follows previous major purchases such as Symantec and CA Technologies.
Following Tan in the rankings is Nikesh Arora, CEO of Palo Alto Networks, who earned $151 million in 2023, with the bulk coming from share grants covering the next three years. Under his leadership since 2018, the company has become a major player in cybersecurity, providing services to 85 of the Fortune 100 companies.
Third on the list is Steve Schwarzman of Blackstone, who earned $120 million last year. Known for his luxurious lifestyle and political engagements, Schwarzman’s income was mostly from equity awards, a common trend among the top-paid executives. Despite his significant earnings, Schwarzman’s total take-home pay, including dividends, saw a decline from $1.2 billion in 2022 to $896.7 million in 2023.
Gender Disparity Among Top Earners
The analysis reveals a stark gender disparity, with no women in the top 25 highest-paid CEOs. The highest-paid woman, Julie Sweet of Accenture, ranks 28th with earnings just over $30 million, followed closely by Lisa Su of Advanced Micro Devices. Despite an increase in the number of female CEOs in S&P 500 companies from 24 in 2020 to 31 in 2023, their representation at the top pay levels remains limited.
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The WSJ’s analysis indicates a broader trend of rising CEO compensation, with the average pay for top executives increasing from $14.5 million in 2022 to $15.7 million in 2023. This trend is driven by performance-based compensation structures, predominantly through stock awards, aligning executives’ interests with those of shareholders.