How Elon Musk helped lift the ceiling on CEO pay

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NEW YORK (NYTIMES) - When Tesla awarded Elon Musk a multibillion-dollar pay package in 2018, the landmark deal helped to vastly increase the potential compensation of the CEOs at many of America's biggest public companies.

The package was composed entirely of an enormous stock grant tied to the company's performance. As Tesla has sold enough electric vehicles to become the most valuable automaker on the planet, Musk has so far received shares worth nearly US$60 billion - helping to make him the world's richest person.

Compensation experts say they see the influence of Musk's deal everywhere. "There's a lot of companies out there that saw that award and its structure," said Brian Johnson, executive director with ISS Corporate Solutions, which advises businesses on executive pay and other practices. "They think it's a good way to incentivise performance."

A new survey conducted for The New York Times by Equilar, a compensation consulting firm, shows that many of last year's highest-paid executives got packages that, like Musk's, could pay out the sort of sums that would have been unthinkable a few years ago.

And even as the gap between what executives and workers earn continued to widen during the pandemic, companies opened the floodgates for what they paid their leaders in 2021. All of the 10 highest-paid executives had compensation over US$100 million, a first. Their average compensation was US$330 million, the highest ever.

But it's not just a few executives at the top enjoying the spoils. Underscoring how widespread the pay increases were last year, the median CEO made US$32.1 million in 2021, up 27 per cent from US$25.3 million in 2020 and far higher than in pre-pandemic years. Jeff Green, CEO of The Trade Desk, a digital advertising company, reported compensation of US$835 million last year, making him the top-paid executive in the Equilar survey, which encompasses 200 companies, all of which have revenue over US $1 billion.

Green's pay in 2021 was the third-highest amount that Equilar found in its past five annual surveys, which are based on companies' pay disclosures; Musk's deal in 2018, which Tesla valued at US$2.3 billion, is still the biggest in those years.

Zig Serafin, CEO of Qualtrics, a software company, was second last year, with compensation of US$541 million. It was the fourth-highest sum of the past five years. Peter Kern, CEO of Expedia, the travel company, was t...

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