Jensen Huang, chief executive and co-founder of Nvidia, recently received his first base salary increase in a decade, even though his company's market capitalization increased by a whopping 281 times since 2015, as noticed by CNBC.
Nvidia's market capitalization increased from $10.47 billion in late January 2015 to $2.94 trillion in early February 2024. The company was the world's most expensive enterprise briefly in mid-2024 and is not the world's third most expensive publicly traded firm, according to CompaniesMarketCap.com. Yet, Jensen Huang continued to receive a fixed salary of $1 million (set in 2015) until this May.
This year, Huang's fixed salary rose by 49% to $1.5 million, while his performance-related cash compensation climbed to $1 million, marking a 50% gain from the prior year. The equity portion of his package reached $38.8 million, bringing his total annual compensation to $49.9 million. The company's board stated that this was his first adjustment in a decade and cited parity with other senior executives as the reason to increase his salary.
"The compensation committee believed this was appropriate in consideration of internal pay equity with the base salaries of other NEOs and as it represented Mr. Huang's first base salary increase in 10 years," a statement by the board of directors with the SEC reads. "His target variable cash opportunity remained at 200% of base salary, increasing to $3 million, which aligned with the median of peers. Mr. Huang's target equity opportunity increased by 25%, to $27.5 million, which aligned slightly above the median of peers."
Huang continues to hold a 3.5% ownership stake in Nvidia, which, due to the firm's soaring valuation, is now worth around $94 billion. The company's market capitalization surged by 281 times since 2015 and more than 9 times since the end of 2022, highlighting investor confidence in its leadership and product dominance, specifically in the AI sector.
These additional costs are part of a broader trend among tech executives receiving non-cash compensation for security and logistical needs. For example, Alphabet disclosed that it spent $8.27 million on personal security and travel for CEO Sundar Pichai in the same timeframe, marking a 22% increase over the prior year, reports Quartz.
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