Apple has the highest market capitalization in the world, but Cook is not the highest-paid CEO, ranking only 10th in the United States last year

Focus

• 1 Executive compensation data and analysis company C-Suite Comp released the latest list, starting with the top ten most paid CEOs in the United States in 2022, of which Pichai ranked second and Cook could only rank tenth.
• 2 Most of the entrants on this list are not the largest U.S. companies, but smaller business leaders, such as Hertz, a taxi company, Peloton, an interactive fitness platform, and the CEO of photo-sharing site Pinterest.
• 3The highest-paid U.S. CEO in 2022 is Blackstone CEO Schwarzman, who earned $253 million, but most of that was carried interest and stock option awards.
• 4 Among the top ten new top CEOs in 2022, Cook ranked tenth, with a salary of $99 million last year, and the only head who has not crossed the $100 million threshold.

Among the highest-paid CEOs of U.S. companies in 2022, the highest-paid people don't always manage the largest companies, with only the helm of three tech giants, Google, Oracle and Apple, squeezing into the top ten.

In the top 10, the CEOs of taxi company Hertz, interactive fitness platform Peloton and photo-sharing site Pinterest all earned more than $100 million in 2022, surpassing the CEOs of the vast majority of companies in the S&P 500, including Apple's Tim Cook (who earned $99 million last year). Also on the list is the CEO of CS Disco, a lawyer-oriented cloud service provider with a market capitalization of about $500 million.

Figure 1: Blackstone CEO Schwarzman earned $253 million last year, making him the highest annual CEO in the United States

According to C-Suite Comp, a firm of executive compensation data and analytics, six of the 10 highest-paid CEOs last year were at companies that were not listed as S&P 500 companies. The S&P 500 includes most of the largest publicly traded companies in the United States.

Stephen Schwarzman, chief executive of private equity giant Blackstone, had the highest total compensation of $253 million. Blackstone's market capitalization of more than $100 billion is higher than many S&P 500 constituents, and its corporate structure resembles a dual-class share structure. Until recently, similar companies were excluded from the index.

Schwarzman beat out Sundar Pichai, the head of Google's parent company Alphabet, who was paid $226 million in 2022, putting Pichai at the top of the Wall Street Journal's annual CEO compensation survey earlier this year. In previous surveys, Pichai was followed by Michael Rapino, CEO of live entertainment company Live Nation, who earned $139 million last year.

Several of the executives on C-Suite Comp's pay list, such as the leaders of Pinterest and Hertz, couldn't make it to the Wall Street Journal's annual pay list because they all took office during the year. The Wall Street Journal's analysis ranked CEOs only after a full year.

Last year, the median compensation for CEOs of S&P 500 companies was $14.5 million, down from $14.7 million the year before.

More broadly, according to C-Suite Comp's analysis, 9 CEOs of nearly 4,000 publicly traded U.S. companies had revenues of more than $100 million in 2022. C-Suite Comp said the number was down from more than 20 in the same period last year due to reduced stock awards.

Figure 2: Top 10 Most Compensated CEOs in the U.S. in 2022

The majority of a CEO's compensation is typically made up of restricted stock or option awards, the value of which can fluctuate. Many equity awards are typically granted only if certain performance goals are met or if the executive continues to be employed for a specific period of time, ultimately becoming the executive's personal asset.

For Blackstone's co-founder, Schwarzman, about $190 million of his compensation came in the form of carried equity and incentive fee distributions. Carried interest refers to the portion of the investment manager that is higher than the target profit. The other $58.8 million is in shares of real estate investment trusts managed by Blackstone.

Schwarzman's total compensation is more than 50% higher than its 2021 salary of $160 million. Including dividends, Blackstone stock returned -40% total last year, compared to -18% for the S&P 500. As of the end of June, Blackstone was back at 22 percent, compared to about 14 percent for the S&P 500.

Schwarzman owns nearly 20 percent of Blackstone, which helped him earn about $1 billion in dividends in 2022.

A Blackstone spokesperson said nearly 30 percent of Schwarzman's 2022 compensation reflected in 2021's investment performance, and the company's share price doubled over the same period. "In fact, all of Schwarzman's compensation is carried rights and incentive fees that are only paid when we provide services to our clients," the spokesperson said. He declined to say how much of Schwarzman's compensation was cash.

At Hertz, its CEO, Stephen Scherr, was paid $182 million in total compensation, including $3.4 million in salaries and bonuses. Another $178 million worth of restricted stock will be granted through 2026, most of which will only be granted if the company's share price reaches a 90-day average price target of up to nearly twice the current share price.

Hertz said in its annual proxy statement that the company has achieved two stock price targets. That means that if Schell stays on until 2026, he will acquire about $50 million worth of equity at near-term prices. In addition, Schell acquired equity worth about $20 million on December 31 last year.

Schell, who previously served as chief financial officer of Goldman Sachs, began as Hertz CEO in February 2022, when the car rental chain was just emerging from bankruptcy protection. During Schell's tenure, Hertz's stock price fell 22 percent last year, while the S&P 500 fell 16 percent. According to securities filings, the company's equity award to Schell was valued at about $128 million at the end of last year. As of June 30, Hertz's stock price is up about 20 percent this year.

Figure 3: Hertz CEO Stephen Schell earned $182 million last year, including $3.4 million in salary and bonuses

A Hertz spokesman declined to comment on issues other than the company's disclosure.

Barry McCarthy began his role as CEO of Peloton in February 2022, having previously served as CFO at Spotify and Netflix. McCarthy's $168 million in compensation at Peloton is almost entirely stock option awards, a portion of which is granted monthly over four years.

Peloton's share price has been close to $7.50 in recent days, and the value of the 8 million options McCarthy has acquired has shrunk, meaning the cost of exercising the option will be higher than the value of the underlying stock. As of June 30, Peloton's stock price has fallen about 3% cumulatively this year, and the company's share price has fallen 79% in 2022 due to the oversupply of exercise bikes sold by the company due to falling demand.

Peloton's representative did not respond to a request for comment.

Figure 4: Peloton CEO Barry McCarthy received $168 million in compensation in 2022, almost all of which was stock options

Of the $123 million Pinterest awarded Bill Ready last year, nearly $101 million was stock options, and $21.5 million worth of restricted stock accounted for most of the rest. Both parts of the award relate to his hiring as CEO in late June 2022.

If Reddy's continues to be employed, the equity award will be paid quarterly for four years. Pinterest said in a filing with securities regulators that the value of Radiodetection's stock and option awards in 2022 had increased to $153.6 million by the end of last year.

Pinterest's stock is up more than 20 percent last year. So far this year, Pinterest shares are up about 13% as of June 30.

A Pinterest spokeswoman said Reddy doesn't expect to receive additional equity awards for the first four years, and the company believes his 2022 equity awards equate to about $30 million per year during that time. Radiody must also buy and hold $5 million in stock.

The spokeswoman said: "If the company performs well, then Reddy's equity awards will become more valuable. If the company does not perform well, his compensation will suffer. ”

CS Disco, a 10-year-old company headquartered in Austin, Texas, that sells online services primarily to law firms, attorneys and legal services firms, is the smallest of the companies with the highest annual revenue for CEOs. Its chief executive and co-founder Kiwi Camara received a $500,000 salary and $109 million worth of stock option awards, a compensation package voted by shareholders last year.

CS Disco's option will only be granted if its 90-day average share price by 2032 reaches any of its six targets, or if the company is acquired, or if Kamala loses his job under certain circumstances.

Kamala had a total revenue of just under $1 million in 2021, the year the company went public at the end of July. The company's shares closed at $8.22 on Friday, up 30% so far this year, but down more than 75% from their peak in early 2022. CS Disco did not respond to a request for comment. (Text/Golden Deer)