COMP NEWS – Silicon Valley has seen a dearth of layoffs and job cuts in the last year and a half, but another phenomenon has occurred too – CEO pay at tech companies jumps just before rounds of layoffs, according to recent data.
While some tech giants neared or imposed widespread layoffs last year, compensation for their CEOs climbed as much as tens of millions of dollars, according to an ABC News analysis of data released by research firm Equilar in May and June.
Alphabet CEO Sundar Pichai was awarded compensation worth more than $225 million in 2022, which marked a staggering 3,474% increase from the previous year, making him the nation’s highest-paid CEO, according to Equilar data.
Near the outset of 2023, Alphabet announced plans to lay off 10,000 workers.
At Microsoft, which initiated plans to lay off 10,000 workers in January, CEO Satya Nadella received compensation worth nearly $55 million in 2022 — a 10% jump from the prior year, the data showed.
Meta, Uber and Salesforce are also among more than a dozen tech companies that gave their CEOs a compensation increase last year, despite announcing layoffs at some point since the start of 2022, according to the ABC News analysis of the Equilar data.
As gargantuan bonuses climb, workforces fall; nearly 400,000 tech workers have been laid off since the beginning of 2022.
Roughly 389,000 tech workers have been laid off since the beginning of 2022, according to Layoffs.fyi, a site that tracks layoffs. The job cuts have befallen some of the nation’s most well-known and large companies.
Alphabet, Meta, Uber and Salesforce did not respond to ABC News’ requests for comment.
The rise of CEO pay amid a cascade of job losses at some household-name tech firms draws attention to the divergent fates of executives and workers in one of the nation’s most lucrative fields, which matches an economy-wide trend of a widening gap between the pay of CEOs and workers, analysts told ABC News.
CEO compensation often includes a base salary and a performance bonus but is typically made up in large part by stock awards that align the CEO primarily with shareholders, analysts added. The incentive structure can push a CEO to safeguard the health of a company but also reward short-term cost cuts that imperil workers, they said.
To read more about climbing CEO pay amidst cuts and layoffs at tech companies, click here.
For more Comp News, see our recent posts.
Comp News is brought to you by CompXL, the flexible compensation software provider that enables mid- to large-size organizations to implement competitive pay structures such as vested stock options and variable incentive pay.
